We previously demonstrated that apolipoprotein E4 (apoE4) potentiates lysosomal leakage and apoptosis induced by amyloid beta (Abeta) peptide in cultured Neuro-2a cells and hypothesized that the low pH of lysosomes accentuates the conversion of apoE4 to a molten globule, inducing reactive intermediates capable of destabilizing cellular membranes. Here we report that neutralizing lysosomal pH with bafilomycin or NH4Cl abolished the apoE4 potentiation of Abeta-induced lysosomal leakage and apoptosis in Neuro-2a cells. Consistent with these results, apoE4 at acidic pH bound more avidly to phospholipid vesicles and disrupted them to a greater extent than at pH 7.4. Comparison of "Arctic" mutant Abeta, which forms multimers, and GM6 mutant Abeta, which remains primarily monomeric, showed that aggregation is essential for apoE4 to potentiate Abeta-induced lysosomal leakage and apoptosis. Both apoE4 and Abeta1-42 had to be internalized to exert these effects. Blocking the low density lipoprotein receptor-related protein with small interfering RNA abolished the enhanced effects of apoE4 and Abeta on lysosomes and apoptosis. In cultured Neuro-2a cells, Abeta1-42 increased lysosome formation to a greater extent in apoE3- or apoE4-transfected cells than in Neo-transfected cells, as shown by immunostaining for lysosome-associated membrane protein 1. Similarly, in transgenic mice expressing apoE and amyloid precursor protein, hippocampal neurons displayed increased numbers of lysosomes. Thus, apoE4 and Abeta1-42 may work in concert in neurons to increase lysosome formation while increasing the susceptibility of lysosomal membranes to disruption, release of lysosomal enzymes into the cytosol, and neuronal degeneration.