Alzheimer’s disease (AD) is a chronic neurodegenerative disorder and the leading cause of dementia, affecting 30 million people worldwide, with the incidence expected to increase. Since memory decline in AD is due to a cholinergic deficit, attempts have been made to compensate for this. To date, acetylcholine esterase inhibitors are the only class of drugs approved by the EMA for the treatment of Alzheimer’s disease. The progression of AD can be altered by lipid-based diets, which are a suitable adjunct to pharmacological treatment of AD, demonstrating the crucial role of cholesterol in regulating β-amyloid production and the pathogenesis of AD. It has been shown that some neurosteroids and steroid hormones at physiological concentrations allosterically modulate cholinergic signalling and that neurosteroids bind to the same binding site on muscarinic receptors as cholesterol. Neuroactive steroids therefore offer the possibility of modulating the negative effects of cholesterol on cholinergic signalling and the progression of Alzheimer’s disease.