The brain-specific enzyme CYP46A1 controls cholesterol turnover by converting cholesterol into 24S-hydroxycholesterol (24OH). Dysregulation of brain cholesterol turnover and reduced CYP46A1 levels are observed in Alzheimer's disease (AD). In this study, we report that CYP46A1 overexpression in aged female mice leads to enhanced estrogen signaling in the hippocampus and improved cognitive functions. In contrast, age-matched CYP46A1 overexpressing males show anxiety-like behavior, worsened memory, and elevated levels of 5α-dihydrotestosterone in the hippocampus. We report that, in neurons, 24OH contributes to these divergent effects by activating sex hormone signaling, including estrogen receptors. CYP46A1 overexpression in female mice protects from memory impairments induced by ovariectomy while having no effects in gonadectomized males. Last, we measured cerebrospinal fluid levels of 24OH in a clinical cohort of patients with AD and found that 24OH negatively correlates with neurodegeneration markers only in women. We suggest that CYP46A1 activation is a valuable pharmacological target for enhancing estrogen signaling in women at risk of developing neurodegenerative diseases.