One of the characteristic neuropathological hallmarks of Alzheimer's disease (AD) is the extracellular accumulation of beta-amyloid peptides (Abeta) in neuritic plaques. Experimental data indicate that different molecular forms of Abeta affect a wide array of neuronal and glial functions and thereby may lead to neuronal death in the nervous system. Whereas the fatal outcome of Abeta overproduction in transgenic cell lines, and of exogenous Abeta administration in numerous neurotoxicity models, is well established, particular facets of a complex molecular cascade by which Abeta attack neural cells are still elusive. In the present review we summarize recent knowledge on mechanisms of Abeta aggregation, its role in Abeta neurotoxicity, and binding of Abeta peptides to putative neuronal and glial receptors. Additionally, an integrative view on the interactions of Ca2+ -mediated excitotoxicity and free radical-induced oxidative stress in Abeta toxicity is provided. Furthermore, we survey advances of pharmacological investigations attempting to prevent and antagonize Abeta toxicity, or to promote neuronal regeneration following Abeta-induced neurotoxic insults. We distinguish two major classes of therapeutic approaches: conventional pharmacotherapy that employs blockade of known receptors, signal transduction pathways, and re-uptake of neurotransmitters, and direct targeting of neurotoxic Abeta by means of beta-sheet breakers, functional anti-Abeta peptides, and antibodies. Although a clinically relevant neuroprotective strategy is not yet available, sequential combination of drug regimens may provide prospects for effective antagonism of late-life Abeta burden and subsequent development of dementia.