Whereas the classical histological hallmarks of Alzheimer's disease (AD) are deposition of amyloid-containing plaques and development of neurofibrillary tangles, there is also clear evidence of inflammatory changes accompanied by the presence of activated microglia and astrocytosis. However, at this time, it remains uncertain whether inflammatory changes contribute to pathogenesis of the disease or if they are secondary to deposition of amyloid-β or other pathological changes. A greater understanding of the sequence of events would clearly improve development of strategies to delay progression of the disease. There is a realistic expectation that advances in imaging technology may provide the key to uncovering this sequence. In this study, we employed non-invasive imaging techniques to examine changes in tissue state in hippocampus and cortex of transgenic mice which overexpress amyloid-β protein precursor and presenilin 1 and show that the observed increase in T1 relaxation time was associated with astrogliosis while the decrease in T2 relaxation time was associated with microglial activation. We explored the possibility that interferon-γ might trigger glial activation and demonstrate a genotype-related infiltration of macrophages and natural killer cells, which release interferon-γ. The evidence suggests that IFNγ triggers glial activation and expression of proinflammatory cytokines, and these changes, in turn, contribute to the decrease in long-term potentiation.