Apolipoprotein E (apoE) epsilon4 allele is a genetic risk factor for late-onset familial and sporadic Alzheimer's disease (AD). In the central nervous system, apoE is secreted mainly by astrocytes as a constituent of high-density lipoproteins. A recent study using apoE knockout mice provided strong evidence that apoE promotes cerebral deposition of amyloid beta protein (Abeta). However, no clear explanation of the pathogenesis of apoE-induced AD has been provided. Here we discuss two possible mechanisms by which apoE might enhance Abeta deposition. One is the intracellular pathway in which apoE is internalized by neurons and induces lysosomal accumulation of Abeta and amyloidogenic APP (amyloid precursor protein) fragments, leading to neuronal death. The other is the extracellular pathway in which apoE-containing lipoproteins are trapped by Abeta1-42 deposits mobilizing soluble Abeta peptides and consequently enlarge amyloid plaques. These two mechanisms may operate at different stages of AD pathogenesis and suggest a chaperone-like function for the apoE molecule