Estrogen plays key regulatory roles in a variety of biological actions besides its classic function as a sex hormone. Recently, estrogen has been linked to neurodegenerative diseases including Alzheimer's disease (AD) and Parkinson's disease (PD). Several lines of evidence support the notion that brain estrogen exerts neuroprotective effects against various types of neurotoxicity in different cellular and animal models. Despite some controversies, estrogen replacement therapy (ERT) at an early stage, especially when given prior to menopause, has been shown to reduce the risk of AD in postmenopausal women. In addition, multiple lines of evidence have proven the neuroprotective effects of estrogen, such as enhancing neurotrophin signaling and synaptic activities pertinent to memory functions and protecting neurons against oxidative injuries and beta-amyloid toxicity; the latter is widely accepted as the prime culprit known to trigger the pathogenesis of AD. Here we will summarize our findings that estrogen decreased generation and secretion of beta-amyloid peptides in cultured cells and primary neurons and that administration of estrogen in estrogen-deprived mice reversed the elevated levels of brain Abeta. We will also discuss the molecular and cellular mechanisms underlying estrogen's effects on Abeta metabolism, which is highlighted by our demonstration that estrogen increases intracellular trafficking of beta-amyloid precursor protein (betaAPP) and hence reduces maximal Abeta generation within the trans-Golgi network (TGN), a subcellular compartment in which APP is known to be cleaved by the secretase enzymes to generate Abeta.