Sphingomyelin (SM) is an abundant plasma membrane and plasma lipoprotein sphingolipid. We previously reported that ATP-binding cassette family A protein 1 (ABCA1) deficiency in humans and mice decreases plasma SM levels. However, overexpression, induction, downregulation, inhibition, and knockdown of ABCA1 in human hepatoma Huh7 cells did not decrease SM efflux. Using unbiased siRNA screening, here, we identified that ABCA7 plays a role in the biosynthesis and efflux of SM without affecting cellular uptake and metabolism. Since loss of function mutations in the ABCA7 gene exhibit strong associations with late-onset Alzheimer's disease across racial groups, we also studied the effects of ABCA7 deficiency in the mouse brain. Brains of ABCA7-deficient (KO) mice, compared with WT, had significantly lower levels of several SM species with long chain fatty acids. In addition, we observed that older KO mice exhibited behavioral deficits in cognitive discrimination in the active place avoidance task. Next, we performed synaptic transmission studies in brain slices obtained from older mice. We found anomalies in synaptic plasticity at the intracortical synapse in layer II/III of the lateral entorhinal cortex but not in the hippocampal CA3-CA1 synapses in KO mice. These synaptic abnormalities in KO brain slices were rescued with extracellular SM supplementation but not by supplementation with phosphatidylcholine. Taken together, these studies identify a role of ABCA7 in brain SM metabolism and the importance of SM in synaptic plasticity and cognition, as well as provide a possible explanation for the association between ABCA7 and late-onset Alzheimer's disease.