The aim of the study was to determine whether the epsilon 4 allele of the apolipoprotein E (ApoE) gene was associated primarily with context-specific memory among individuals at genetic risk for developing Alzheimer's disease. The effect of ApoE status on comprehensive neuropsychological results was examined in 176 healthy adults during baseline cognitive testing in the NIMH Prospective Study of Biomarkers for Older Controls at Risk for Alzheimer's Disease (NIMH Prospective BIOCARD Study). The presence of the epsilon 4 allele was associated with significantly lower total scores on the Logical Memory II subtest of the Wechsler Memory Scale-Revised and percent of information retained after delay. Further analysis indicated the prose recall and retention effect was partially explained by a small subgroup of epsilon 4 homozygotes, suggesting a gradually progressive process that may be presaged with specific cognitive measures. The current results may represent an epsilon 4-associated breakdown between gist-related information and context-bound veridical recall. This relative disconnection may be understood in light of putative epsilon 4-related preclinical accumulation of Alzheimer pathology (tangles and plaques) in the entorhinal cortex (EC) and among frontal networks, as well as the possibility of less-efficient compensatory strategies.