Niemann-Pick type C1 (NPC1) disease is a rare, progressively fatal neurodegenerative disease for which there are no FDA-approved therapies. A major barrier to developing new therapies for this disorder has been the lack of a sensitive and noninvasive diagnostic test. Recently, we demonstrated that two cholesterol oxidation products, specifically cholestane-3β,5α,6β-triol (3β,5α,6β-triol) and 7-ketocholesterol (7-KC), were markedly increased in the plasma of human NPC1 subjects, suggesting a role for these oxysterols in diagnosis of NPC1 disease and evaluation of therapeutics in clinical trials. In the present study, we describe the development of a sensitive and specific LC-MS/MS method for quantifying 3β,5α,6β-triol and 7-KC human plasma after derivatization with N,N-dimethylglycine. We show that dimethylglycine derivatization successfully enhanced the ionization and fragmentation of 3β,5α,6β-triol and 7-KC for mass spectrometric detection of the oxysterol species in human plasma. The oxysterol dimethylglycinates were resolved with high sensitivity and selectivity, and enabled accurate quantification of 3β,5α,6β-triol and 7-KC concentrations in human plasma. The LC-MS/MS assay was able to discriminate with high sensitivity and specificity between control and NPC1 subjects, and offers for the first time a noninvasive, rapid, and highly sensitive method for diagnosis of NPC1 disease.