Cholesterol 24-hydroxylase (CYP46A1) is an exclusively neuronal cytochrome P450 enzyme responsible for converting cholesterol into 24S-hydroxycholesterol, which serves as the primary pathway for eliminating cholesterol in the brain. We and others have shown that increased activity of CYP46A1 leads to reduced levels of cholesterol and has a positive effect on cognition. Therefore, we hypothesized that CYP46A1 could be a potential therapeutic target in Niemann-Pick type C (NPC) disease, a rare and fatal neurodegenerative disorder, characterized by cholesterol accumulation in endolysosomal compartments. Herein, we show that CYP46A1 ectopic expression, in cellular models of NPC and in Npc1tm(I1061T) mice by adeno-associated virus-mediated gene therapy improved NPC disease phenotype. Amelioration in functional, biochemical, molecular and neuropathological hallmarks of NPC disease were characterized. In vivo, CYP46A1 expression partially prevented weight loss and hepatomegaly, corrected the expression levels of genes involved in cholesterol homeostasis, and promoted a redistribution of brain cholesterol accumulated in late endosomes/lysosomes. Moreover, concomitant with the amelioration of cholesterol metabolism dysregulation, CYP46A1 attenuated microgliosis and lysosomal dysfunction in mouse cerebellum, favoring a pro-resolving phenotype. In vivo CYP46A1 ectopic expression improves important features of NPC disease and may represent a valid therapeutic approach to be used concomitantly with other drugs. However, promoting cholesterol redistribution does not appear to be enough to prevent Purkinje neuronal death in the cerebellum. This indicates that cholesterol buildup in neurons might not be the main cause of neurodegeneration in this human lipidosis.