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Summary: Dyslipidemia including the accumulation of cholesteryl esters (CEs) in the brain is associated with neurological disorders, although the underlying mechanism has been unclear. PDZD8, a Rab7 effector protein, transfers lipids between endoplasmic reticulum (ER) and Rab7-positive organelles and thereby promotes endolysosome maturation and contributes to the maintenance of neuronal integrity. Here we show that CEs accumulate in the brain of PDZD8-deficient mice as a result of impaired lipophagy. This CE accumulation was not affected by diet, implicating a defect in intracellular lipid metabolism. Whereas cholesterol synthesis appeared normal, degradation of lipid droplets (LDs) was defective, in the brain of PDZD8-deficient mice. PDZD8 may mediate the exchange of cholesterol and phosphatidylserine between ER and Rab7-positive organelles to promote the fusion of CE-containing LDs with lysosomes for their degradation. Our results thus suggest that PDZD8 promotes clearance of CEs from the brain by lipophagy, with this role of PDZD8 likely contributing to brain function.