Apolipoprotein E (apoE) is a 34 kDa protein that plays an important role in cholesterol transport, uptake and redistribution. Within the nervous system, apoE might be involved in maintaining synaptic integrity after injury and during aging. ApoE might help maintain the integrity of the synaptodendritic complex by several different mechanisms. Among them, recent studies have suggested that apoE: (1) stabilizes the neuronal cytoskeleton; (2) plays an important role in transporting esterified cholesterol to neurons undergoing reinnervation where it is taken up by the low density lipoprotein receptor-related protein pathway and used as a precursor for the synthesis of new synaptic terminals; (3) regulates interactions between neurons and the extracellular matrix (e.g. laminin); and (4) regulates levels of intracellular calcium. The main objective of the manuscript is to review the current progress in understanding the functions of apoE in the nervous system and how malfunctioning of this molecule might result in neurodegenerative disorders such as Alzheimer's disease.