Cellular cholesterol levels alter the processing of the amyloid precursor protein (APP) to produce Abeta. Activation of liver X receptors (LXRs), one cellular mechanism to regulate cholesterol homeostasis, has been found to alter Abeta levels in vitro and in vivo. To identify genes regulated by LXR, we treated human neuroblastoma cells with an LXR agonist (TO-901317) and examined gene expression by microarray. As expected, TO-901317 upregulated several cholesterol metabolism genes, but it also decreased expression of a metalloprotease inhibitor, TIMP-3. We confirmed this finding using real-time PCR and by measuring TIMP-3 protein in glia, SY5Y cells, and COS7 cells. TIMP-3 is a member of a family of metalloproteinase inhibitors and blocks A disintegrin and metalloproteinase-10 (ADAM-10) and ADAM-17, two APP alpha-secretases. We found that TIMP-3 inhibited alpha-secretase cleavage of APP and an apolipoprotein E (apoE) receptor, ApoER2. TIMP-3 decreased surface levels of ADAM-10, APP, and ApoER2. These changes were accompanied by increased APP beta-C-terminal fragment and Abeta production. These data suggest that TIMP-3 preferentially routes APP and ApoER2 away from the cell surface and alpha-secretase cleavage and encourages endocytosis and beta-secretase cleavage. In vivo, TO-901317 decreased brain TIMP-3 levels. TIMP-3 protein levels were increased in human Alzheimer's disease (AD) brain and in APP transgenic mice, suggesting that increased levels of TIMP-3 in AD may contribute to higher levels of Abeta.