Alzheimer’s disease (AD) is a progressive neurodegenerative disease characterized by microscopic lesions consisting of beta-amyloid plaques and neurofibrillary tangles (NFTs). The majority of cases are defined as sporadic and are likely caused by a combination of both genetic and environmental factors. Of the genetic risk factors identified, the 34 kDa protein, apolipoprotein (apo) E4, is of significant importance as APOE4 carriers account for 65%–80% of all AD cases. Although apoE4 plays a normal role in lipoprotein transport, how it contributes to AD pathogenesis is currently unknown. One potential mechanism by which apoE4 contributes to disease risk is its propensity to undergo proteolytic cleavage generating N- and C-terminal fragments. The purpose of this review will be to examine the mechanisms by which apoE4 contributes to AD pathogenesis focusing on the potential loss or gain of function that may occur following cleavage of the full-length protein. In this context, a discussion of whether targeting apoE4 therapeutically is a rationale approach to treating this disease will be assessed.