Liver X receptors (LXRs) regulate immune cell function and cholesterol metabolism, both factors that are critically involved in Alzheimer's disease (AD). To investigate the therapeutic potential of long-term LXR activation in amyloid-β (Aβ) peptide deposition in an AD model, 13-month-old, amyloid plaque-bearing APP23 mice were treated with the LXR agonist TO901317. Postmortem analysis demonstrated that TO901317 efficiently crossed the blood–brain barrier. Insoluble and soluble Aβ levels in the treated APP23 mice were reduced by 80% and 40%, respectively, compared with untreated animals. Amyloid precursor protein (APP) processing, however, was hardly changed by the compound, suggesting that the observed effects were instead mediated by Aβ disposal. Despite the profound effect on Aβ levels, spatial learning in the Morris water maze was only slightly improved by the treatment. ABCA1 (ATP-binding cassette transporter 1) and apolipoprotein E (ApoE) protein levels were increased and found to be primarily localized in astrocytes. Experiments using primary microglia demonstrated that medium derived from primary astrocytes exposed to TO901317 stimulated phagocytosis of fibrillar Aβ. Conditioned medium from TO901317-treated ApoE^−/− or LXRα^−/− astrocytes did not increase phagocytosis of Aβ. In APP23 mice, long-term treatment with TO901317 strongly increased the association of microglia and Aβ plaques. Short-term treatment of APP/PS1 mice with TO901317 also increased this association, which was dependent on the presence of LXRα and was accompanied by increased ApoE lipidation. Together, these data suggest that astrocytic LXRα activation and subsequent release of ApoE by astrocytes is critical for the ability of microglia to remove fibrillar Aβ in response to treatment with TO901317.