Alzheimer's disease is the most common type of dementia with a still largely unclear etiopathology. One of the factors that may directly contribute to the development and progression of the disorder is the abundant accumulation of beta-amyloid peptides (A beta) in senile plaques. In the present account we review coherent in vivo experimental evidence that A beta infusion into the rat magnocellular nucleus basalis (MBN) induces abrupt and persistent behavioral dysfunctions, perturbations of sensory information processing, storage, and retrieval. These substantial behavioral changes are due to the loss of cholinergic neurons in the MBN and their ascending projections to the frontoparietal cortex. Both neuroanatomical and neurochemical observations pin-point that infusion of A beta into the rat basal forebrain significantly decreases choline-acetyltransferase and acetylcholinesterase activities and the population of--probably--M2 muscarinic acetylcholine receptors in the cerebral cortex. Neuropharmacological data indicate that A beta toxicity is mediated by an excitotoxic cascade involving blockade of astroglial glutamate uptake, sustained activation of N-methyl-D-aspartate receptors and an overt intracellular Ca2+ influx. These changes are associated with increased nitric oxide synthase activity in cortical target areas that may directly lead to the generation of free radicals. Besides, as microvessels of the neocortex receive direct input from the MBN we assume that the loss of cholinergic innervation and hence that of tonic cholinergic vasoregulation ultimately leads to disturbances of vascular (endothelial) function and nutrient supply that may directly enhance neuronal vulnerability during aging and in Alzheimer's disease.