While the central nervous system compromises 2% of our body weight, it harbors up to 25% of the body’s cholesterol. Cholesterol levels in the brain are tightly regulated for physiological brain function, but mounting evidence indicates that excessive cholesterol accumulates in Alzheimer’s disease (AD), where it may drive AD-associated pathological changes. This seems especially relevant for late-onset AD, as several of the major genetic risk factors are functionally associated with cholesterol metabolism. In this review we discuss the different systems that maintain brain cholesterol metabolism in the healthy brain, and how dysregulation of these processes can lead, or contribute to, Alzheimer’s disease. We will also discuss how AD-risk genes might impact cholesterol metabolism and downstream AD pathology. Finally, we will address the major outstanding questions in the field and how recent technical advances in CRISPR/Cas9-gene editing and induced pluripotent stem cell (iPSC)-technology can aid to study these problems.