Amyloid β (Aβ) peptides generated from the amyloid precursor protein (APP) play a critical role in the development of Alzheimer's disease (AD) pathology. Aβ-containing neuronal exosomes, which represent a novel form of intercellular communication, have been shown to influence function/vulnerability of neurons in AD. Unlike neurons, the significance of exosomes derived from astrocytes remains unclear. In this study, we evaluated the significance of exosomes derived from U18666A-induced cholesterol-accumulated astrocytes in the development of AD pathology. Our results show that cholesterol accumulation decreases exosome secretion, whereas lowering cholesterol level increases exosome secretion from cultured astrocytes. Interestingly, exosomes secreted from U18666A-treated astrocytes contain higher levels of APP, APP-CTFs, soluble APP, APP secretases and Aβ1-40 than exosomes secreted from control astrocytes. Furthermore, we show that exosomes derived from U18666A-treated astrocytes can lead to neurodegeneration, which is attenuated by decreasing Aβ production or by neutralizing exosomal Aβ peptide with an Aβ antibody. These results, taken together, suggest that exosomes derived from cholesterol-accumulated astrocytes can play an important role in trafficking APP/Aβ peptides and influencing neuronal viability in the affected regions of the AD brain.