Apolipoprotein E (apoE) has been studied extensively with regard to its role in plasma lipoprotein lipid transport. A role for apoE in the transport of membrane cholesterol and phospholipid in the central and peripheral nervous system has also been studied. Entorhinal cortex-lesioned rats have been used extensively to examine the molecular mechanisms associated with deafferentation and reinnervation in the CNS; studies of the role of apoE in this process using this animal model are described. In all human populations examined, three common apoE isoforms, apoE2, apoE3 and apoE4, result from multiple alleles epsilon 2, epsilon 3 and epsilon 4 at a single apoE genetic locus. These isoforms impart well-characterized functional differences in plasma lipoprotein transport, which are reviewed herein. Also discussed are less well-studied possible apoE-isoform specific differences in central nervous system function. These are currently of critical importance due to numerous recent studies showing an association of epsilon 4 with increased risk for Alzheimer's disease. Diverse hypotheses as to the molecular basis for this association, as well as the supporting experimental evidence, are reviewed.