Amyloid beta (Aβ) is a major component of amyloid plaques, which are a key pathological hallmark found in the brains of Alzheimer's disease (AD) patients. We show that statins are effective at reducing Aβ in human neurons from nondemented control subjects, as well as subjects with familial AD and sporadic AD. Aβ is derived from amyloid precursor protein (APP) through sequential proteolytic cleavage by BACE1 and γ-secretase. While previous studies have shown that cholesterol metabolism regulates APP processing to Aβ, the mechanism is not well understood. We used iPSC-derived neurons and bimolecular fluorescence complementation assays in transfected cells to elucidate how altering cholesterol metabolism influences APP processing. Altering cholesterol metabolism using statins decreased the generation of sAPPβ and increased levels of full-length APP (flAPP), indicative of reduced processing of APP by BACE1. We further show that statins decrease flAPP interaction with BACE1 and enhance APP dimerization. Additionally, statin-induced changes in APP dimerization and APP-BACE1 are dependent on cholesterol binding to APP. Our data indicate that statins reduce Aβ production by decreasing BACE1 interaction with flAPP and suggest that this process may be regulated through competition between APP dimerization and APP cholesterol binding.