Cholesterol metabolism operates autonomously within the central nervous system (CNS), where the majority of cholesterol resides in myelin. We demonstrate that TDP-43, the pathological signature protein for amyotrophic lateral sclerosis (ALS) and frontotemporal dementia (FTD), influences cholesterol metabolism in oligodendrocytes. TDP-43 binds directly to mRNA of SREBF2, the master transcription regulator for cholesterol metabolism, and multiple mRNAs encoding proteins responsible for cholesterol biosynthesis and uptake, including HMGCR, HMGCS1, and LDLR. TDP-43 depletion leads to reduced SREBF2 and LDLR expression, and cholesterol levels in vitro and in vivo. TDP-43–mediated changes in cholesterol levels can be restored by reintroducing SREBF2 or LDLR. Additionally, cholesterol supplementation rescues demyelination caused by TDP-43 deletion. Furthermore, oligodendrocytes harboring TDP-43 pathology from FTD patients show reduced HMGCR and HMGCS1, and coaggregation of LDLR and TDP-43. Collectively, our results indicate that TDP-43 plays a role in cholesterol homeostasis in oligodendrocytes, and cholesterol dysmetabolism may be implicated in TDP-43 proteinopathies–related diseases.