Endoplasmic reticulum (ER) appears to be a focal point for alterations that result in neuronal dysfunction and death in Alzheimer's disease (AD). Aberrant proteolytic processing and/or trafficking of the beta-amyloid precursor protein (APP) in ER may promote neuronal degeneration by increasing the levels of the neurotoxic forms of beta-amyloid (A beta) and by decreasing the levels of the neuroprotective secreted form of APP (sAPP alpha). Some cases of AD are caused by mutations in the genes encoding presenilin 1 (PS1). When expressed in cultured neuronal cells and transgenic mice, PS1 mutations cause abnormalities in ER calcium homoeostasis, enhancing the calcium responses to stimuli that activate IP3- and ryanodine-sensitive ER calcium pools. Two major consequences of this disrupted ER calcium regulation are altered proteolytic processing of APP and increased vulnerability of neurons to apoptosis and excitotoxicity. The impact of PS1 mutations and aberrant APP processing is particularly great in synaptic terminals. Perturbed synaptic calcium homoeostasis promotes activation of apoptotic cascades involving production of Par-4 (prostate apoptosis response-4), mitochondrial dysfunction and caspase activation. A beta 42 (the 42-amino-acid form of A beta) induces membrane lipid peroxidation in synapses and dendrites resulting in impairment of membrane ion-motive ATPases and glucose and glutamate transporters. This disrupts synaptic ion and energy homoeostasis thereby promoting synaptic degeneration. In contrast, sAPP alpha activates signalling pathways that protect synapses against excitotoxicity and apoptosis. In the more common sporadic forms of AD, the initiating causes of the neurodegenerative cascade are less well defined, but probably involve increased levels of oxidative stress and impaired energy metabolism. Such alterations have been shown to disrupt neuronal calcium homoeostasis in experimental models, and may therefore feed into the same neurodegenerative cascade initiated by mutations in presenilins and APP. Perturbed synaptic ER calcium homoeostasis and consequent alterations in APP processing appear to be pivotal events in both sporadic and familial forms of AD.