Mice with deficiency in tocopherol (alpha) transfer protein gene develop peripheral tocopherol deficiency and sensory neurodegeneration. Ttpa-/- mice maintained on diets with deficient α-tocopherol (α-TOH) had proprioceptive deficits by six months of age, axonal degeneration and neuronal chromatolysis within the dorsal column of the spinal cord and its projections into the medulla. Transmission electron microscopy revealed degeneration of dorsal column axons. We addressed the potential pathomechanism of α-TOH deficient neurodegeneration by global transcriptome sequencing within the spinal cord and cerebellum. RNA-sequencing of the spinal cord in Ttpa-/- mice revealed upregulation of genes associated with the innate immune response, indicating a molecular signature of microglial activation as a result of tocopherol deficiency. For the first time, low level Ttpa expression was identified in the murine spinal cord. Further, the transcription factor liver X receptor (LXR) was strongly activated by α-TOH deficiency, triggering dysregulation of cholesterol biosynthesis. The aberrant activation of transcription factor LXR suppressed the normal induction of the transcription factor retinoic-related orphan receptor-α (RORA), which is required for neural homeostasis. Thus we find that α-TOH deficiency induces LXR, which may lead to a molecular signature of microglial activation and contribute to sensory neurodegeneration.