With the increase of population aging, the number of Alzheimer's disease (AD) patients is also increasing. According to current estimates, approximately 11% of people over 65 suffer from AD, and that percentage rises to 42% among people over 85. However, no effective treatment capable of decelerating or stopping AD progression is available. Furthermore, AD-targeted drugs composed of synthetic molecules pose concerns regarding biodegradation, clearance, immune response, and neurotoxicity. Mesenchymal stem cell-derived extracellular vesicles (MSC-EVs) are essential intercellular communication mediators holding great promise as AD therapeutics owing to their biocompatibility, versatility, effortless storage, superior safety, and the ability to transport messenger and noncoding RNAs, proteins, lipids, DNAs, and other bioactive compounds derived from cells. The functionalisation and engineering strategies of MSC-EVs are highlighted (e.g. preconditioning, drug loading, surface modification, and artificial EV fabrication), which could improve AD treatment by multiple therapeutic effects, including clearing abnormal protein accumulation and achieving neuroprotection and immunomodulatory effects. Herein, this review summarises state-of-the-art strategies to engineer MSC-EVs, discusses progress in their use as AD therapeutics, presents the perspectives and challenges associated with the related clinical applications, and concludes that engineered MSC-EVs show immense potential in AD therapy.