The presence of the apolipoprotein E (apoE) allele epsilon4 is a major risk factor for the development of Alzheimer's disease (AD); however, the molecular mechanism underlying the acceleration of AD development in individuals with epsilon4 remains to be determined. To investigate the isoform-specific effects of apoE on neurons, primary neuron cultures were prepared from fetal rat cerebral cortices. Inhibition by compactin, a 3-hydroxyl-3-methylglutaryl coenzyme A reductase inhibitor of de novo cholesterol synthesis, induced premature neuronal cell death in a dose-dependent manner. In the presence of compactin at a sublethal dose to the cells, rabbit beta-migrating very low density lipoprotein (beta-VLDL) with human apoE4 (the product of epsilon4) induced premature neuronal cell death, while that with apoE3 (the product of epsilon3) did not. Neurons cultured in the presence of apoE4, beta-VLDL, and compactin were shrunken and spherical, containing condensed chromatin and fragmented DNA, features characteristic of apoptosis. The addition of intermediate metabolites of the cholesterol biosynthetic pathway, including mevalonate and squalene, rescued neuronal cells incubated with apoE4 and beta-VLDL, in the presence of compactin. These results strongly suggest that a reduction in the level of endogenously synthesized cholesterol is a prerequisite for apoE4-induced neuronal cell death.