Gene dosage of the apolipoprotein E (APOE) epsilon 4 allele is a major risk factor for familial Alzheimer disease (AD) of late onset (after age 60). Here we studied a large series of 115 AD case subjects and 243 controls as well as 150 affected and 197 unaffected members of 66 AD families. Our data demonstrate a protective effect of the epsilon 2 allele, in addition to the dose effect of the epsilon 4 allele in sporadic AD. Although a substantial proportion (65%) of AD is attributable to the presence of epsilon 4 alleles, risk of AD is lowest in subjects with the epsilon 2/epsilon 3 genotype, with an additional 23% of AD attributable to the absence of an epsilon 2 allele. The opposite actions of the epsilon 2 and epsilon 4 alleles further support the direct involvement of APOE in the pathogenesis of AD.