The pathogenesis of Alzheimer's disease is highly complex. While several pathologies characterize this disease, amyloid plaques, composed of the beta-amyloid peptide are hallmark neuropathological lesions in Alzheimer's disease brain. Indeed, a wealth of evidence suggests that beta-amyloid is central to the pathophysiology of AD and is likely to play an early role in this intractable neurodegenerative disorder. The BACE1 enzyme is essential for the generation of beta-amyloid. BACE1 knockout mice do not produce beta-amyloid and are free from Alzheimer's associated pathologies including neuronal loss and certain memory deficits. The fact that BACE1 initiates the formation of beta-amyloid, and the observation that BACE1 levels are elevated in this disease provide direct and compelling reasons to develop therapies directed at BACE1 inhibition thus reducing beta-amyloid and its associated toxicities. However, new data indicates that complete abolishment of BACE1 may be associated with specific behavioral and physiological alterations. Recently a number of non-APP BACE1 substrates have been identified. It is plausible that failure to process certain BACE1 substrates may underlie some of the reported abnormalities in the BACE1-deficient mice. Here we review BACE1 biology, covering aspects ranging from the initial identification and characterization of this enzyme to recent data detailing the apparent dysregulation of BACE1 in Alzheimer's disease. We pay special attention to the putative function of BACE1 during healthy conditions and discuss in detail the relationship that exists between key risk factors for AD, such as vascular disease (and downstream cellular consequences), and the pathogenic alterations in BACE1 that are observed in the diseased state.