For years, extracellular deposition of the ''pathologic'' b-amyloid 1-42 (Ab42) in the brain has been considered as the major cause of the appearance of neuritic plaques that are subsequently responsible for neuronal death in Alzheimer's disease (AD). However, recent work has shown that significant amounts of b-amyloid, especially Ab42, are being sequestered within the perikaryon of affected pyramidal neurons prior to the appearance of plaques. This has led us to challenge the prevailing theory and suggest that at least some of the amyloid plaques, specifically the dense-core plaques in the cerebrum and hippocampus, may derive from the lysis of those neurons that are overburdened with intracellular Ab42. We discuss the possible role of intracellular Ab42 accumulation in the development of AD pathology and review an alternate hypothesis, where Ab42 is first accumulated inside the neurons and later released out to the brain parenchyma via neuronal lysis finally forming a dense-core plaque (''InsideOut'' hypothesis). We describe a mechanism for Ab42 internalization into neurons that involves the high affinity interaction between Ab42 and the alpha7 nicotinic acetylcholine receptor (a7nAChR) and the internalization and intracellular accumulation of the Ab42/a7nAChR complex. This alternative hypothesis can account for many of the well-known features of AD pathology, including specific cholinergic and cholinoceptive neuronal and synaptic loss that affects cognitive and memory functions, the distribution, morphology and composition of dense-core plaques, and their association with inflammation. More importantly, it provides the scientific rationale for targeting the mechanisms that lead to the intraneuronal Ab42 as a novel strategy for AD drug discovery. Drug Dev.