In this review, we discuss the role of liver X receptors (LXRs) in glial cells (microglia, oligodendrocytes and astrocytes) in the central nervous system (CNS). LXRs are oxysterol-activated nuclear receptors that, in adults, regulate genes involved in cholesterol homeostasis, the modulation of inflammatory responses and glutamate homeostasis. The study of LXR knockout mice has revealed that LXRβ plays a key role in maintaining the health of dopaminergic neurons in the substantia nigra, large motor neurons in the spinal cord and retinal ganglion cells in the eye. In the peripheral nervous system (PNS), LXRβ is responsible for the health of the spiral ganglion neurons (SGNs) in the cochlea. In addition, LXRs are essential for the homeostasis of the cerebrospinal fluid (CSF), and in LXRαβ−/− mice, the lateral ventricles are empty and lined with lipid-laden cells. As LXRαβ−/− mice age, lipid vacuoles accumulate in astrocytes surrounding blood vessels. By seven months of age, motor coordination becomes impaired, and there is a loss of motor neurons in the spinal cord of LXRβ−/− mice. During development, migration of neurons in the cortex and cerebellum is retarded in LXRβ−/− mice. Since LXRs are not expressed in dopaminergic or motor neurons in adult mice, the neuroprotective effects of LXRs appear to come from LXRs in glial cells where they are expressed. However, despite the numerous neurological deficits in LXR−/− rodents, multiple sclerosis has the clear distinction of being the only human neurodegenerative disease in which defective LXR signaling has been identified. In this review, we summarize the regulation and functions of LXRs in glial cells and analyze how targeting LXRs in glial cells might, in the future, be used to treat neurodegenerative diseases and, perhaps, disorders caused by aberrant neuronal migration during development.