Lanosterol, an amphipathic molecule, was discovered only very recently to effectively hinder the aggregation of lens proteins and dissolve the extremely stable fibrillar aggregates in cataracts. Here, we combined computational and experimental approaches to study how lanosterol disrupts the aggregation of another important peptide, amyloid-β (Aβ) peptide, associated with the Alzheimer's Disease (AD). Molecular dynamics simulations using the core amyloidogenic segment (KLVFFA) of Aβ peptide revealed that lanosterol exhibits at least two types of inhibition mechanism on the self-assembly of Aβ peptides. First, lanosterol entangles with peptides and forms a hydrophobic core with residues Phe-19 and Phe-20 in particular. Second, it interferes with the steric zipper interaction at the β-sheet-β-sheet interface. These simulation data suggest that lanosterol induces the unfolding of the Aβ peptide and the separation of the β-sheet layers. This predicted inhibition effect of lanosterol was then confirmed by an in vitro ThT fluorescence assay and AFM imaging. The cell toxicity assay also showed that the treatment of lanosterol indeed mitigates the cytotoxicity of the Aβ peptide in PC-12 cells. Moreover, lanosterol shows a stronger suppression effect on Aβ peptides' aggregation than cholesterol because of its higher hydrophobicity. This result establishes a foundation for the development of lanosterol-based potential therapies for AD and other protein conformational diseases.