It has been suggested that cholesterol may modulate amyloid-beta (Abeta) formation, a causative factor of Alzheimer's disease (AD), by regulating distribution of the three key proteins in the pathogenesis of AD (beta-amyloid precursor protein (APP), beta-secretase (BACE1) and/or presenilin 1 (PS1)) within lipid rafts. In this work we tested whether cholesterol accumulation upon NPC1 dysfunction, which causes Niemann Pick type C disease (NPC), causes increased partitioning of APP into lipid rafts leading to increased CTF/Abeta formation in these cholesterol-rich membrane microdomains. To test this we used CHO NPC1(-/-) cells (NPC cells) and parental CHOwt cells. By sucrose density gradient centrifugation we observed a shift in fl-APP/CTF compartmentalization into lipid raft fractions upon cholesterol accumulation in NPC vs. wt cells. Furthermore, gamma-secretase inhibitor treatment significantly increased fl-APP/CTF distribution in raft fractions in NPC vs. wt cells, suggesting that upon cholesterol accumulation in NPC1-null cells increased formation of APP-CTF and its increased processing towards Abeta occurs in lipid rafts. Our results support that cholesterol overload, such as in NPC disease, leads to increased partitioning of APP/CTF into lipid rafts resulting in increased amyloidogenic processing of APP in these cholesterol-rich membranes. This work adds to the mechanism of the cholesterol-effect on APP processing and the pathogenesis of Alzheimer's disease and supports the role of lipid rafts in these processes.