Alzheimer's disease (AD) is a degenerative disease of the brain, and the most common form of dementia. It is estimated that more than 22 million individuals worldwide will have AD by 2025. The causes of the disease are still unknown and recent hypotheses suggest that an aberrant protein processing initiates the neurodegeneration. Several lines of research are centered on the study of proteins that are genetically associated with this syndrome, such as amyloid precursor protein (APP) and presenilins. This review focuses on recent advances in the processing of APP and on the neuropathological role of its amyloidogenic fragments, which have been shown to be directly involved in neurodegeneration and glial inflammation and which likely influence the development of AD.