Type C Niemann-Pick disease is characterized by abnormal intracellular cholesterol homeostasis. Patients with this fatal disorder experience progressive central nervous system impairment characterized by ataxia, dysarthria, dysphonia, dementia and paralysis of vertical movements of the eyes. The gene that is altered in this condition was previously localized to human chromosome 18. The gene (NPC1) that is mutated in the majority of patients with Type C Niemann-Pick disease has been cloned as well as the gene for the murine homolog of human NPC. A large number of discrete alterations in the gene have been identified. The gene codes for a protein of 1278 amino acids. It has several unique structural features consisting of 13 to 16 membrane-spanning regions. It has sequences similar to the morphogen receptor PATCHED and the putative sterol-sensing regions of SREB cleavage-activating protein (SCAP) and 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA) reductase which are involved in mediating cholesterol homeostasis. Patients with Type D Niemann-Pick disease, a genetic isolate in Nova Scotia, have mutations in the same gene. There is, however, a second gene at a different chromosome site that when mutated results in a clinical phenotype similar to that of the NPC1 gene. Approximately five percent of patients with the NPC syndrome have a mutation in this gene. The availability of the NPC1 gene opens a major field of investigation of intracellular cholesterol metabolism. Identification of specific genotypes provides for accurate genetic counseling. In addition, exploration of proteins, gene and pharmacologic therapies are now possible. These studies are abetted by the mutant mouse that has a specific mutation in the NPC1 gene.