Peroxidation of membrane lipids results in release of the aldehyde 4‐hydroxynonenal (HNE), which is known to conjugate to specific amino acids of proteins and may alter their function. Because accumulating data indicate that free radicals mediate injury and death of neurons in Alzheimer's disease (AD) and because amyloid β‐peptide (Aβ) can promote free radical production, we tested the hypothesis that HNE mediates Aβ25‐35‐induced disruption of neuronal ion homeostasis and cell death. Aβ induced large increases in levels of free and protein‐bound HNE in cultured hippocampal cells. HNE was neurotoxic in a time‐ and concentration‐dependent manner, and this toxicity was specific in that other aldehydic lipid peroxidation products were not neurotoxic. HNE impaired Na⁺,K⁺‐ATPase activity and induced an increase of neuronal intracellular free Ca²⁺ concentration. HNE increased neuronal vulnerability to glutamate toxicity, and HNE toxicity was partially attenuated by NMDA receptor antagonists, suggesting an excitotoxic component to HNE neurotoxicity. Glutathione, which was previously shown to play a key role in HNE metabolism in nonneuronal cells, attenuated the neurotoxicities of both Aβ and HNE. The antioxidant propyl gallate protected neurons against Aβ toxicity but was less effective in protecting against HNE toxicity. Collectively, the data suggest that HNE mediates Aβ‐induced oxidative damage to neuronal membrane proteins, which, in turn, leads to disruption of ion homeostasis and cell degeneration.