Among the three human apolipoprotein E (apoE) isoforms, apoE4 increases the risk of Alzheimer's disease (AD). While transporting cholesterol is a primary function, apoE also regulates amyloid-β (Aβ) metabolism, aggregation, and deposition. Although earlier work suggests that different affinities of apoE isoforms to Aβ might account for their effects on Aβ clearance, recent studies indicate that apoE also competes with Aβ for cellular uptake through apoE receptors. Thus, several factors probably determine the variable effects apoE has on Aβ. In this Review, we examine biochemical, structural, and functional studies and propose testable models that address the complex mechanisms underlying apoE-Aβ interaction and how apoE4 may increase AD risk and also serve as a target pathway for therapy.