Apolipoprotein E (apoE, protein; APOE, gene) plays an important role in lipoprotein metabolism by acting as a ligand for two specific cell receptors to mediate the uptake of apoE-containing lipoproteins by cells. The APOE gene, located on chromosome 19, exhibits a genetic polymorphism with three common alleles, APOE*2, APOE*3, and APOE*4, which show marked variation in their distribution among various ethnic groups. APOE polymorphism has a profound effect on interindividual variation in plasma cholesterol level in the general population, and this effect has made the APOE gene one of the most recognized and appreciated genes today. In addition to its pivotal involvement in lipoprotein metabolism, apoE is thought to participate in seemingly unrelated metabolic pathways, including the normal development of the nervous system and peripheral nerve regeneration after injury. The most dramatic and unexpected finding in this regard was made in early 1993, when it was reported that the presence of the APOE*4 allele is a significant risk factor for the development of late-onset familial Alzheimer's disease, a debilitating brain disorder. Since then, a number of studies have confirmed this provocative association and also have found that the APOE*4 allele is a major risk factor for Alzheimer's disease regardless of age at onset or family history. ApoE appears to contribute directly to the pathogenesis of Alzheimer's disease because it has been immunochemically localized in three defining lesions of the disease (extracellular amyloid plaques, intracellular neurofibrillary tangles, and vascular amyloid deposits). In this article I review current data about the association between APOE polymorphism and Alzheimer's disease and possible physiological mechanisms behind this association.