Cathepsin D (CTSD) deficiencies are fatal neurological diseases that in human infants and in sheep are characterized by extreme loss of neurons and myelin. To date, similar morphological evidence for myelin disruption in CTSD knockout mice has not been reported. Here, we show that CTSD deficiency leads to pronounced myelin changes in the murine brain: myelin-related proteolipid protein and myelin basic protein were both markedly reduced at postnatal day 24, and the amount of lipids characteristically high in myelin (e.g. plasmalogen-derived alkenyl chains and glycosphingolipid-derived 20- and 24-carbon acyl chains) were significantly lowered compared with controls. These changes were accompanied by ultrastructural alterations of myelin, including significant thinning of myelin sheaths. Furthermore, in CTSD knockout brains there was a pronounced accumulation of cholesteryl esters and abnormal levels of proteins related to cholesterol transport, with an increased content of apolipoprotein E and a reduced content of ATP-binding cassette transporter A1. These results provide evidence for dysmyelination and altered trafficking of cholesterol in brains of CTSD knockout mice, and warrant further studies on the role of lipid metabolism in the pathogenesis of CTSD deficiencies.