Alzheimer's disease (AD), a progressive, degenerative disorder of the brain, is believed to be the most common cause of dementia amongst the elderly. AD is characterized by the presence of amyloid deposits and neurofibrillary tangles in the brain of afflicted individuals. AD is associated with a loss of the presynaptic markers of the cholinergic system in the brain areas related to memory and learning. AD appears to have a heterogeneous etiology with a large percentage termed sporadic AD arising from unknown causes and a smaller fraction of early onset familial AD (FAD) caused by mutations in one of several genes, such as the beta-amyloid precursor protein (APP) and presenilins (PS1, PS2). These proteins along with tau, secretases, such as beta-amyloid cleaving enzyme (BACE), and apolipoprotein E play important roles in the pathology of AD. On therapeutic fronts, there is significant research underway in the development of new inhibitors for BACE, PS-1 and gamma-secretase as targets for treatment of AD. There is also a remarkable advancement in understanding the function of cholinesterase (ChE) in the brain and the use of ChE-inhibitors in AD. A new generation of acetyl- and butyryl cholinesterase inhibitors is being studied and tested in human clinical trials for AD. The development of vaccination strategies, anti-inflammatory agents, cholesterol-lowering agents, anti-oxidants and hormone therapy are examples of new approaches for treating or slowing the progression of AD. In addition, nutritional, genetic and environmental factors highlight more effective preventive strategies for AD. Developments of early diagnostic tools and of quantitative markers are critical to better follow the course of the disease and to evaluate different therapeutic strategies. In this review, we attempt to critically examine recent trends in AD research from molecular, genetic to clinical areas. We discuss various neurobiological mechanisms that provide the basis of new targets for AD drug development. All these current research efforts should lead to a deeper understanding of the pathobiochemical processes that occur in the AD brain in order to effectively diagnose and prevent their occurrence.