Conversion of prion protein (PrP(C)) into a pathological isoform (PrP(Sc)) during prion infection occurs in lipid rafts and is dependent on cholesterol. Here, we show that prion infection increases the abundance of cholesterol transporter, ATP-binding cassette transporter type A1 (ATP-binding cassette transporter type A1), but reduces cholesterol efflux from neuronal cells leading to the accumulation of cellular cholesterol. Increased abundance of ABCA1 in prion disease was confirmed in prion-infected mice. Mechanistically, conversion of PrP(C) to the pathological isoform led to PrP(Sc) accumulation in rafts, displacement of ABCA1 from rafts and the cell surface, and enhanced internalization of ABCA1. These effects were abolished with reversal of prion infection or by loading cells with cholesterol. Stimulation of ABCA1 expression with liver X receptor agonist or overexpression of heterologous ABCA1 reduced the conversion of prion protein into the pathological form upon infection. These findings demonstrate a reciprocal connection between prion infection and cellular cholesterol metabolism, which plays an important role in the pathogenesis of prion infection in neuronal cells.