Liver X receptors (LXRs) are members of the nuclear receptor superfamily that are involved in cholesterol and lipid metabolism. In addition to liver, the brain is another site where LXRs may control cholesterol homeostasis. In the brain, the regulation of cholesterol homeostasis is independent from other parts of the body, and its disturbance is associated with neurodegenerative disorders, such as Alzheimer's disease. We have used PCR-based suppressive subtractive cloning to identify new LXR target genes in brain cells. In this report, we show that farnesyl pyrophosphate synthase (FPPS) is a new target gene for LXR in astrocytes and neurons. Farnesyl pyrophosphate is an obligate intermediate for de novo cholesterol synthesis and a substrate for protein farnesylation. Stimulation of FPPS mRNA synthesis by an LXR agonist, Hypocholamide, was observed in several cell lines from the central nervous system. We identified a single putative direct repeat 4 (DR4) LXR response element in the FPPS promoter. In a reporter gene assay, LXR transactivated a reporter gene bearing a truncated FPPS promoter containing this DR4 cis-element but not if the DR4 element was mutated. Using gel-mobility shift assay, we further demonstrated the direct interaction between the LXR/retinoid X receptor (RXR) heterodimer and the response element. Taken together, our results indicate that LXRs directly regulate FPPS gene expression, and thus may play a role in modulating cholesterol synthesis in the brain.