The acquisition of neuronal type-specific morphogenesis is a central feature of neuronal differentiation and has important consequences for region-specific nervous system functions. Here, we report that the cell type-specific cholesterol profile determines the differential modulation of axon and dendrite outgrowths in hippocampal and cerebral cortical neurons in culture. The extent of axon and dendrite outgrowths is greater and the polarity formation occurs earlier in cortical neurons than in hippocampal neurons. The cholesterol concentrations in total homogenate and the lipid rafts from hippocampal neurons are significantly higher than those from cortical neurons. Cholesterol depletion by beta-cyclodextrin markedly enhanced the neurite outgrowth and accelerated the establishment of neuronal polarity in hippocampal neurons, which were similarly observed in nontreated cortical neurons, whereas cholesterol loading had no effects. In contrast, both depletion and loading of cholesterol decreased the neurite outgrowths in cortical neurons. The stimulation of neurite outgrowth and polarity formation induced by cholesterol depletion was accompanied by an enhanced localization of Fyn, a Src kinase, in the lipid rafts of hippocampal neurons. A concomitant treatment with beta-cyclodextrin and a Src family kinase inhibitor, PP2, specifically blocked axon outgrowth but not dendrite outgrowth ( both of which were enhanced by beta-cyclodextrin) in hippocampal neurons, suggesting that axon outgrowth modulated by cholesterol is induced in a Fyn-dependent manner. These results suggest that cellular cholesterol modulates axon and dendrite outgrowths and neuronal polarization under culture conditions and also that the difference in cholesterol profile between hippocampal and cortical neurons underlies the difference in neurite outgrowth between these two types of neurons.