Niemann-Pick type C disease (NPC) is a neurodegenerative and lipid storage disorder for which no effective treatment is known. We previously reported that neural stem cells derived from NPC1 mice showed impaired self-renewal and differentiation. We examined whether valproic acid (VPA), a historic deacetylase inhibitor, Could enhance neuronal differentiation and recover defective cholesterol metabolism in neural stem cell; (NSCs) from NPC1-deficient mice (NPC1(-/-)). VPA could induce neuronal differentiation and restore impaired astrocytes in NSCs from NPC1(-/-) mice. Importantly, an increasing level of cholesterol within NSCs from NPC1(-/-) mice could be reduced by VPA. Moreover, essential neurotrophic genes (Trk B, BDNF, MnSoD, and NeuroD) were up-regulated through the repression of the REST/NRSF and HDAC complex by the VPA treatment. Up-regulated neurotrophic genes were able to enhance neural differentiation and cholesterol homeostasis in neural stem cells from NPC1(-/-) mice. In this study, we suggested that, along with cholesterol homeostasis. impaired neuronal differentiation and abnormal morphology of astrocytes could be rescued by the inhibition of HDAC and REST/NRSF activity induced by VPA treatment. (c) 2007 Published by Elsevier Inc.