Cholesterol is a prominent modulator of the integrity and functional activity of physiological membranes and the most abundant sterol in the mammalian brain. DHCR24-knock-out mice lack cholesterol and accumulate desmosterol with age. Here we demonstrate that brain cholesterol deficiency in 3-week-old DHCR24−/− mice was associated with altered membrane composition including disrupted detergent-resistant membrane domain (DRM) structure. Furthermore, membrane-related functions differed extensively in the brains of these mice, resulting in lower plasmin activity, decreased β-secretase activity and diminished Aβ generation. Age-dependent accumulation and integration of desmosterol in brain membranes of 16-week-old DHCR24−/− mice led to the formation of desmosterol-containing DRMs and rescued the observed membrane-related functional deficits. Our data provide evidence that an alternate sterol, desmosterol, can facilitate processes that are normally cholesterol-dependent including formation of DRMs from mouse brain extracts, membrane receptor ligand binding and activation, and regulation of membrane protein proteolytic activity. These data indicate that desmosterol can replace cholesterol in membrane-related functions in the DHCR24−/− mouse.