Alzheimer's disease (AD) is a progressive neurodegenerative illness marked by memory loss and at least one other cognitive disturbance. Early diagnosis of the disease has proved difficult and has therefore been the focus of much research. Apolipoprotein E (ApoE), a protein manufactured and distributed throughout the body, has shown specificity of binding to the beta A4 peptide, the primary component in the senile plaques of AD. Furthermore, the ApoE, epsilon 4 (epsilon 4) allele, is overrepresented in AD. These two lines of evidence suggest that ApoE, specifically the epsilon 4 allele, plays an important role in the development of AD. Further support for this hypothesis appears in neuropsychological data showing cognitive decrements in ostensibly nondemented individuals with the epsilon 4 allele, compared to those without the allele. It is also well known that olfaction is compromised in AD. Thus, the purpose of this study was twofold: (1) to examine very early changes in olfactory functioning due to AD and (2) to examine the role of ApoE in olfactory functioning in people at risk for AD by virtue of early cognitive decline. Results demonstrated changes in olfactory threshold the year immediately preceding change in diagnosis from normal control to AD. Also, in individuals with mild cognitive impairment, those with the ApoE epsilon 4 allele show poorer thresholds than those without the epsilon 4 allele.