Like several other adult onset neurodegenerative diseases, Alzheimer's disease is a multifactorial illness with both genetic and non-genetic causes. Recent genetic studies have identified four genes associated with inherited risk for AD (presenilin 1, presenilin 2, amyloid precursor protein, and apolipoprotein E). These genes account for about half of the total genetic risk for Alzheimer's disease. It is suspected that several other Alzheimer's disease-susceptibility genes exist, and their identification is the subject of ongoing research. Nevertheless, biological studies on the effects of mutations in the four known genes has led to the conclusion that all of these genes cause dysregulation of amyloid precursor protein processing and in particular dysregulation of the handling of a proteolytic derivative termed Abeta. The accumulation of Abeta appears to be an early and initiating event that triggers a series of downstream processes including misprocessing of the tau protein. This cascade ultimately causes neuronal dysfunction and death, and leads to the clinical and pathological features of Alzheimer's disease. Knowledge of this biochemical cascade now provides several potential targets for the development of diagnostics and therapeutics.