The epsilon4 allele of apolipoprotein E (apoE) is a risk factor for Alzheimer's disease (AD) and cerebral amyloid angiopathy (CAA). The mechanism underlying this increased risk is not completely clear, yet mounting evidence supports the idea that the ability of apoE to interact with the amyloid-beta (Abeta) peptide and influence its conformation and clearance plays a major role. Evidence to support this concept comes from in vitro and in vivo studies of apoE/Abeta interactions and the effects of these interactions on Abeta conformation and cellular clearance. Recent studies on the effect of murine and human apoE in APP transgenic mice provide direct evidence that apoE is critically involved in the in vivo converstion of Abeta into forms which contain high 5-sheet content and associated cellular toxicity (neuritic plaques and CAA). These studies also suggest a role for human apoE in Abeta clearance in vivo.