Cholesterol is a multifacetted molecule. First, it serves as an essential membrane component, as a cofactor for signaling molecules and as a precursor for steroid hormones; second, its synthesis, intercellular transport and intracellular distribution present a logistic tour de force requiring hundreds of cellular components, and third, it plays a crucial role in major human diseases. Despite intense research on this molecule, its metabolism in the central nervous stystem and its role in neuronal development and function are not well understood. Here I summarize recent results and hypotheses about how neurons maintain their cholesterol level and how cholesterol influences the establishment and maintenance of synaptic connections.