Liver X receptors (LXR) are nuclear receptors that have emerged as key regulators of lipid metabolism. In addition to their functions as cholesterol sensors, LXR have also been found to regulate inflammatory responses in macrophages. Alzheimer's disease (AD) is a neurodegenerative disease characterized by a progressive cognitive decline associated with inflammation. Evidence indicates that the initiation and progression of AD is linked to aberrant cholesterol metabolism and inflammation. Activation of LXR can regulate neuroinflammation and decrease amyloid-β peptide accumulation. Here, we highlight the role of LXR in orchestrating lipid homeostasis and neuroinflammation in the brain. In addition, diabetes mellitus is also briefly discussed as a significant risk factor for AD because of the appearing beneficial effects of LXR on glucose homeostasis. The ability of LXR to attenuate AD pathology makes them potential therapeutic targets for this neurodegenerative disease.