The anticancer drug bexarotene has been shown to restore cognitive functions in animal models of Alzheimer's disease, but its exact mechanism of action remains elusive. In the present report, we have used a combination of molecular, physicochemical, and cellular approaches to elucidate the mechanisms underlying the anti-Alzheimer properties of bexarotene in neural cells. First of all, we noticed that bexarotene shares a structural analogy with cholesterol. We showed that cholesterol and bexarotene compete for the same binding site in the C-terminal region of Alzheimer's β-amyloid peptide 1-42 (Aβ1-42). This common bexarotene/cholesterol binding domain was characterized as a linear motif encompassing amino acid residues 25-35 of Aβ1-42. Because cholesterol is involved in the oligomerization of Alzheimer's β-amyloid peptides into neurotoxic amyloid channels, we studied the capability of bexarotene to interfere with this process. We showed that nanomolar concentrations of bexarotene efficiently prevented the cholesterol-dependent increase of calcium fluxes induced by β-amyloid peptides Aβ1-42 and Aβ25-35 in SH-SY5Y cells, suggesting a direct effect of the drug on amyloid channel formation. Molecular dynamics simulations gave structural insights into the role of cholesterol in amyloid channel formation and explained the inhibitory effect of bexarotene. Because it is the first drug that can both inhibit the binding of cholesterol to β-amyloid peptides and prevent calcium-permeable amyloid pore formation in the plasma membrane of neural cells, bexarotene might be considered as the prototype of a new class of anti-Alzheimer compounds. The experimental approach developed herein can be used as a screening strategy to identify such compounds.