Cholesterol synthesis in the fetal brain is inhibited because activity of DHCR24 (24-dehydrocholesterol reductase) is insufficient, causing concentrations of the precursor desmosterol to increase temporarily to 15-25% of total sterols at birth. We demonstrate that failure of DHCR24 to be adequately upregulated during periods of elevated cholesterol synthesis in the brain results from the presence in its promoter of the repressor element 1 (RE1) nucleotide sequence that binds the RE1-silencing transcription factor (REST) and that REST, generally reduced in neural tissues, uncharacteristically but not without precedent, enhances DHCR24 transcription. DHCR24 and REST mRNA levels are reduced 3- to 4-fold in fetal mouse brain compared to liver (p < 0.001). Chromatin immunoprecipitation assays suggested that REST binds to the human DHCR24 promoter in the vicinity of the predicted human RE1 sequence. Luminescent emission from a human DHCR24 promoter construct with a mutated RE1 sequence was reduced 2-fold compared to output from a reporter with wild-type RE1 (p < 0.005). Silencing REST in HeLa cells resulted in significant reductions of DHCR24 mRNA (2-fold) and DHCR24 protein (4-fold). As expected, relative concentrations of Δ(24)-cholesterol precursor sterols increased 3- to 4-fold, reflecting the inhibition of DHCR24 enzyme activity. In contrast, mRNA levels of DHCR7 (sterol 7-dehydrocholesterol reductase), a gene essential for cholesterol synthesis lacking an RE1 sequence, and concentrations of HMGR (3-hydroxy-3-methyl-glutaryl-CoA reductase) enzyme protein were both unaffected. Surprisingly, a dominant negative fragment of REST consisting of just the DNA binding domain (about 20% of the protein) and full-length REST enhanced DHCR24 expression equally well. Furthermore, RE1 and the sterol response element (SRE), the respective binding sites for REST and the SRE binding protein (SREBP), are contiguous. These observations led us to hypothesize that REST acts because it is bound in close proximity to SREBP, thus amplifying its ability to upregulate DHCR24. It is likely that modulation of DHCR24 expression by REST persisted in the mammalian genome either because it does no harm or because suppressing metabolically active DHCR24 while providing abundant quantities of the multifunctional sterol desmosterol during neural development proved useful.