Amyloid β-peptide (Aβ) plays a critical role in the development of Alzheimer's disease (AD). Much progress has been made in understanding this age-related neurodegenerative disorder, thus an insight into the cellular actions of Aβ and resulting functional consequences may contribute to preventive and therapeutic approaches for AD. In this review, recent evidence of Aβ-induced brain dysfunction, particularly of cholinergic impairment and memory deficits is summarized. Moreover, proposed mechanisms for Aβ-induced neurotoxicity such as oxidative stress, ion-channel formation, and Aβ-receptor interaction are discussed.