Chronic psychosocial stress is increasingly being recognised as a risk factor for sporadic Alzheimer's disease (AD). The hypothalamic-pituitary-adrenal axis (HPA axis) is the major stress response pathway in the body and tightly regulates the production of cortisol, a glucocorticoid hormone. Dysregulation of the HPA axis and increased levels of cortisol are commonly found in AD patients and make a major contribution to the disease process. The underlying mechanisms remain poorly understood. In addition, within the general population there are interindividual differences in sensitivities to glucocorticoid and stress responses, which are thought to be due to a combination of genetic and environmental factors. These differences could ultimately impact an individuals' risk of AD. The purpose of this review is first to summarise the literature describing environmental and genetic factors that can impact an individual's HPA axis reactivity and function and ultimately AD risk. Secondly, we propose a mechanism by which genetic factors that influence HPA axis reactivity may also impact inflammation, a key driver of neurodegeneration. We hypothesize that these factors can mediate glucocorticoid priming of the immune cells of the brain, microglia, to become pro-inflammatory and promote a neurotoxic environment resulting in neurodegeneration. Understanding the underlying molecular mechanisms and identifying these genetic factors has implications for evaluating stress-related risk/progression to neurodegeneration, informing the success of interventions based on stress management and potential risks associated with the common use of glucocorticoids.