The pathological processes that lead to Alzheimer's disease (AD) begin decades before the onset of dementia. Brain abnormalities in genetically susceptible individuals have been observed even in young adults. Patients with AD differ from normal elderly patients in brain morphology and neurochemistry. Important observations include increasing appearance of amyloid plaques and neurofibrillary tangles, progressive loss of hippocampal volume, reduced cerebral glucose utilization, inflammatory processes, glial activation, and impairment of cholinergic function with losses of nicotinic acetylcholine receptors. These changes appear to begin in the asymptomatic stages and continue as cognition and then function and behavior are disrupted. Mild cognitive impairment (MCI) may be the first cognitive manifestation of this pathogenic process moderated by ongoing compensatory neurochemical mechanisms in the cholinergic system. Recent advances in positron emission tomography imaging techniques, including the development of the Pittsburgh B compound (PIB), allow in vivo visualization of amyloid plaques. These techniques have the potential to enable brain amyloid load to be monitored over time and to be related to brain function. Emerging evidence suggests that β-amyloid may interact with nicotinic receptors. This interaction may have clinically significant downstream effects and may mediate amyloid neurotoxicity. The cholinesterase inhibitors may have multiple actions, depending on the stage of the disease, from very mild to severe.