Research into the cause of Alzheimer's disease (AD) has identified strong connections to cholesterol. Cholesterol and cholesterol esters can modulate amyloid precursor protein (APP) processing, thus altering production of the Abeta peptides that deposit in cortical amyloid plaques. Processing depends on the encounter between APP and cellular secretases, and is thus subject to the influence of cholesterol-dependent factors including protein trafficking, and distribution between membrane subdomains. We have directly investigated endogenous membrane beta-secretase activity in the presence of a range of membrane cholesterol levels in SH-SY5Y human neuroblastoma cells and human platelets. Membrane cholesterol significantly influenced membrane beta-secretase activity in a biphasic manner, with positive correlations at higher membrane cholesterol levels, and negative correlations at lower membrane cholesterol levels. Platelets from individuals with AD or mild cognitive impairment (n = 172) were significantly more likely to lie within the negative correlation zone than control platelets (n = 171). Pharmacological inhibition of SH-SY5Y beta-secretase activity resulted in increased membrane cholesterol levels. Our findings are consistent with the existence of a homeostatic feedback loop between membrane cholesterol level and membrane beta-secretase activity, and suggest that this regulatory mechanism is disrupted in platelets from individuals with cognitive impairment.