The development of the ventral midbrain is orchestrated by a number of cell-extrinsic and -intrinsic factors that control critical processes, such as the patterning of the neural tube along the main body axis and the specification of diverse neuronal cell types in distinct positions of the neural tube. Subsequently, the regulation of neurogenesis and survival- acquire particular relevance in order to define the final size of diverse neuronal populations. In a series of studies during the last few years, we have identified liver X receptors (LXRs) as critical regulators of ventral midbrain development. Moreover, specific cholesterol derivatives present in the midbrain or in the cerebrospinal fluid were identified as LXR ligands, capable of specifically and selectively regulating neurogenesis and the survival of distinct neuronal populations, including midbrain dopamine neurons. These studies have shown that cholesterol derivatives are an entirely new class of factors capable of regulating both neuronal survival and neurogenesis, thus providing a direct link between cholesterol metabolism and brain development. In addition, LXRs and cholesterol metabolism were found to play a critical role in regulating the balance between neuronal survival and death in diverse midbrain neuronal populations. In this review, we will focus on these two aspects and on the possible role of cholesterol metabolism and LXRs in neurodegeneration.