The serine protease plasmin can efficiently degrade amyloid peptide in vitro, and is found at low levels in the hippocampus of patients with Alzheimer's disease (AD). The cause of such paucity remains unknown. We show here that the levels of total brain plasminogen and plasminogen-binding molecules are normal in these brain samples, yet plasminogen membrane binding is greatly reduced. Biochemical analysis reveals that the membranes of these brains have a mild, still significant, cholesterol reduction compared to age-matched controls, and anomalous raft microdomains. This was reflected by the loss of raft-enriched proteins, including plasminogen-binding and -activating molecules. Using hippocampal neurons in culture, we demonstrate that removal of a similar amount of membrane cholesterol is sufficient to induce raft disorganization, leading to reduced plasminogen membrane binding and low plasmin activity. These results suggest that brain raft alterations may contribute to AD by rendering the plasminogen system inefficient.