Until recently, the only established function of acetylcholinesterase (AChE) was the termination of cholinergic neurotransmission. Therefore, the use of AChE inhibitors to treat symptoms caused by cholinergic imbalances in Alzheimer disease (AD) represented a rational approach. However, it is now clear that AChE and the cholinergic system may have broader effects in AD. Of particular interest may be signal transduction pathways mediated through cholinergic receptors that promote nonamyloidogenic amyloid precursor protein processing and decrease tau phosphorylation, and the role of AChE in the aggregation of beta-amyloid (Abeta) peptide. In addition, the neuronal and nonneuronal cholinergic systems have important roles in the modulation of regional cerebral blood flow. These findings may modify the overly simplistic cholinergic hypothesis in AD that is limited to symptomatic treatment and ignores the potential of cholinergic therapies as disease-modifying agents. Chronic increases in AChE activity may exacerbate neurodegenerative processes, make clinically relevant levels of AChE inhibition more difficult to achieve, and cause the therapeutic value of cholinesterase inhibitors (ChE-Is) to be limited and temporary. Rapidly reversible ChE-Is appear to increase AChE activity over the longer term whereas, remarkably, irreversible or very slowly reversible ChE-Is do not seem to have this effect. If such differences between ChE-Is are shown to have clinical correlates, this may prompt reconsideration of the rationale and expectations of some agents in the long-term management of AD.