The association of the APOE4 (vs. APOE3) isoform with an increased risk of Alzheimer's disease (AD) is unequivocal, but the underlying mechanisms remain incompletely elucidated. A prevailing hypothesis incriminates the impaired ability of APOE4 to clear neurotoxic amyloid-beta peptides (A beta) from the brain as the main mechanism linking the apolipoprotein isoform to disease etiology. The APOE protein mediates lipid transport both within the brain and from the brain to the periphery, suggesting that lipids may be potential co-factors in APOE4-associated physiopathology. The present study reveals several changes in the pathways of lipid homeostasis in the brains of mice expressing the human APOE4 vs. APOE3 isoform. Carriers of APOE4 had altered cholesterol turnover, an imbalance in the ratio of specific classes of phospholipids, lower levels of phosphatidylethanolamines bearing polyunsaturated fatty acids and an overall elevation in levels of monounsaturated fatty acids. These modifications in lipid homeostasis were related to increased production of A beta peptides as well as augmented levels of tau and phosphorylated tau in primary neuronal cultures. This suite of APOE4-associated anomalies in lipid homeostasis and neurotoxic protein levels may be related to the accrued risk for AD in APOE4 carriers and provides novel insights into potential strategies for therapeutic intervention.