Alzheimer’s disease (AD) is clinically characterized with progressive memory loss and cognitive decline. Synaptic dysfunction is an early pathological feature that occurs prior to neurodegeneration and memory dysfunction. Mounting evidence suggests that aggregation of amyloid-β (Aβ) and hyperphosphorylated tau leads to synaptic deficits and neurodegeneration, thereby to memory loss. Among the established genetic risk factors for AD, the ɛ4 allele of apolipoprotein E (APOE) is the strongest genetic risk factor. We and others previously demonstrated that apoE regulates Aβ aggregation and clearance in an isoform-dependent manner. While the effect of apoE on Aβ may explain how apoE isoforms differentially affect AD pathogenesis, there are also other underexplored pathogenic mechanisms. They include differential effects of apoE on cerebral energy metabolism, neuroinflammation, neurovascular function, neurogenesis, and synaptic plasticity. ApoE is a major carrier of cholesterols that are required for neuronal activity and injury repair in the brain. Although there are a few conflicting findings and the underlying mechanism is still unclear, several lines of studies demonstrated that apoE4 leads to synaptic deficits and impairment in long-term potentiation, memory and cognition. In this review, we summarize current understanding of apoE function in the brain, with a particular emphasis on its role in synaptic plasticity and the underlying cellular and molecular mechanisms, involving low-density lipoprotein receptor-related protein 1 (LRP1), syndecan, and LRP8/ApoER2.