The glial glutamate transporter EAAT2 (excitatory amino acid transporter 2) is the major mediator of glutamate clearance that terminates glutamate-mediated neurotransmission. Loss of EAAT2 and associated glutamate uptake function has been reported in the brains of patients with Alzheimer's disease (AD). We previously reported that EAAT2 is associated with lipid raft microdomains of the plasma membrane. In the present study, we demonstrated that association of EAAT2 with lipid rafts is disrupted in AD brains. This abnormality is not a consequence of neuron degeneration, oxidative stress, or amyloid beta toxicity. In AD brains, cholesterol 24S-hydroxylase (CYP46), a key enzyme in maintenance of cholesterol homeostasis in the brain, is markedly increased in astrocytes but decreased in neurons. We demonstrated that increased expression of CYP46 in primary astrocytes results in a reduction of membrane cholesterol levels and leads to the dissociation of EAAT2 from lipid rafts and the loss of EAAT2 and associated glutamate uptake function. These results suggest that a disturbance of cholesterol metabolism may contribute to loss of EAAT2 in AD.