Amyloid-beta precursor protein (APP) is a membrane-spanning protein with a large extracellular domain and a much smaller intracellular domain. It is the source of the amyloid-beta (Abeta) peptide found in neuritic plaques of Alzheimer's disease (AD) patients. Because Abeta shows neurotoxic properties, and because familial forms of AD promote Abeta accumulation, a massive international research effort has been aimed at understanding the mechanisms of Abeta generation, catabolism and toxicity. APP, however, is an extremely complex molecule that may be a functionally important molecule in its full-length configuration, as well as being the source of numerous fragments with varying effects on neural function. For example, one fragment derived from the non-amyloidogenic processing pathway, secreted APPalpha (sAPPalpha), is neuroprotective, neurotrophic and regulates cell excitability and synaptic plasticity, while Abeta appears to exert opposing effects. Less is known about the neural functions of other fragments, but there is a growing interest in understanding the basic biology of APP as it has become recognized that alterations in the functional activity of the APP fragments during disease states will have complex effects on cell function. Indeed, it has been proposed that reductions in the level or activity of certain APP fragments, in addition to accumulation of Abeta, may play a critical role in the cognitive dysfunction associated with AD, particularly early in the course of the disease. To test and modify this hypothesis, it is important to understand the roles that full-length APP and its fragments normally play in neuronal structure and function. Here we review evidence addressing these fundamental questions, paying particular attention to the contributions that APP fragments play in synaptic transmission and neural plasticity, as these may be key to understanding their effects on learning and memory. It is clear from this literature that APP fragments, including Abeta, can exert a powerful regulation of key neural functions including cell excitability, synaptic transmission and long-term potentiation, both acutely and over the long-term. Furthermore, there is a small but growing literature confirming that these fragments correspondingly regulate behavioral learning and memory. These data indicate that a full account of cognitive dysfunction in AD will need to incorporate the actions of the full complement of APP fragments. To this end, there is an urgent need for a dedicated research effort aimed at understanding the behavioral consequences of altered levels and activity of the different APP fragments as a result of experience and disease.