Amyloid deposits are characteristic of Alzheimer's Disease (AD) and there is growing evidence that amyloid may play an important role in the genesis of this neurodegenerative disease. This review discusses data which suggests that reactive astrocytes and microglia may be a necessary concomitant with amyloid to produce the neuropathology which manifests as AD. Several hypotheses and supporting data for mechanisms by which reactive astrocytes may mediate this neuropathology are presented. These include the possibility that amyloid induces excitotoxicity by interferring with astrocytic glutamate uptake, the possibility that amyloid has this effect via an action on a tachykinin-related receptor and the possibility that proteoglycans released by astrocytes may facilitate the deposition of amyloid plaques. Both symptomatic treatment to enhance cognitive function and treatment to stop the progression of AD are needed. It is hoped that answers to some of the unique questions raised here may provide new insight into the etiology and treatment of AD.