Alzheimer's disease (AD) is a heterogeneous neurodegenerative disorder and the most prevalent form of dementia worldwide. AD is characterized pathologically by amyloid-? plaques, neurofibrillary tangles and neuronal loss, and clinically by a progressive loss of cognitive abilities. At present, the fundamental molecular mechanisms underlying the disease are unclear and no treatment for AD is known. Epidemiological evidence continues to mount linking vascular diseases, such as hypertension and diabetes, and hypercholesterolaemia with an increased risk for developing AD. A growing amount of evidence suggests a mechanistic link between cholesterol metabolism in the brain and the formation of amyloid plaques in AD development. Cholesterol and statins clearly modulate ?-amyloid precursor protein (?APP) processing in cell culture and animal models. Statins not only reduce endogenous cholesterol synthesis but also exert other various pleiotrophic effects, such as the reduction in protein isoprenylation. Through these effects statins modulate a variety of cellular functions involving both cholesterol (and membrane rafts) and isoprenylation. Although clearly other factors, such as vascular inflammation, oxidative stress and genetic factors, are intimately linked with the progression of AD, this review focuses on the present research findings describing the effect of cholesterol, membrane rafts and isoprenylation in regulating ?APP processing and in particular ?-secretase complex assembly and function and AD progression, along with consideration for the potential role statins may play in modulating these events.