Exceptional advances have been made in understanding the genetics of how common polymorphisms of the apolipoprotein E gene influence the risk and age of onset of Alzheimer disease (AD). The major genetic susceptibility locus for the common forms of AD, there are 3 common alleles, designated epsilon2, epsilon3, and epsilon4. The inheritance of each dose of APOE4 increases the risk of disease and decreases the age of onset; conversely, the APOE2 allele appears to be protective, by lowering the risk of disease and increasing the age of onset. Testing for the APOE4 allele can be a clinically useful tool in the early diagnosis of cognitively impaired patients suspected of having AD. The APOE4 allele also negatively influences functional recovery following a variety of brain insults. What remains in the study of apolipoprotein E is an explanation of how minor changes in a protein can produce such striking differences in risk and age of onset. In vitro and animal model studies strongly suggest that brain apolipoprotein E is a multifunctional molecule, with potential roles in amyloid deposition and clearance, microtubule stability, intracellular signaling, immune modulation, glucose metabolism, oxidative stress, and other cellular processes. While the relevance of these proposed functions to the etiology of AD remains a mystery, these and other hypotheses will be tested as the field of apoE neurobiology grows, adding relevant new data to the functions of apoE in health and in the pathogenic mechanisms leading to AD.