Human ApoE is a plasma and cerebrospinal fluid protein that serves as a ligand for low density lipoprotein receptors and, through its interaction with these receptors, appears to be involved in the transport of cholesterol and other lipids among the nervous cells. ApoE is synthesized by astrocytes in brain and by macrophages in peripheral nerves during the repair response to tissue injury and regeneration. In the nervous system ApoE may also be involved in processes unrelated to lipid transport, the processes that were completely unsuspected until very recently and have led to the link between ApoE and the neurodegenerative disorder--Alzheimer's disease. The lipoprotein has been found in association with cerebral amyloid deposits and the presence of the epsilon 4 allele constitutes a major genetic risk factor for Alzheimer's disease but does not influence the rate of cognitive decline. It has been shown that ApoE4 promotes fibrillogenesis in vivo and in vitro from amyloid beta peptide and ApoE3 binds to tau protein slowing the initial rate of its phosphorylation and self-assembling into paired helical filaments. This review summarizes the data leading to this conclusion and discusses possible mechanisms: of ApoE involvement based on recent biochemical studies. The clinical application of ApoE level estimation in cerebrospinal fluid and phenotyping is presented.