Apolipoprotein E (apoE) alters the pathophysiology of Alzheimer's disease, but its mechanism is not fully understood. We examined the effects of recombinant human apoE3 and apoE4 on the neuronal calcium response to N-methyl-D-aspartate (NMDA), and compared them to their toxicity. ApoE4 (100 nM) significantly increased the resting calcium (by 70%) and the calcium response to NMDA (by 185%), whereas similar changes were not obtained in apoE3-treated neurons. ApoE4, but not apoE3, also significantly increased neurotoxicity, as evidenced by enhanced lactate dehydrogenase release (by 53%) and reduced 3-(4,5-dimethylthiazol-2-yl)-2,5,diphenyltetrazolium bromide levels (by 32%). ApoE4-induced changes in the calcium response to NMDA and associated neurotoxicity were blocked by coincubation with MK-801. Both the receptor-associated protein, which inhibits interaction of apoE with members of the LDL receptor family, including the low-density lipoprotein receptor-related protein (LRP), and activated alpha2-macroglobulin, another LRP ligand, prevented apoE4-induced enhancement of the calcium response to NMDA, resting calcium levels, and neurotoxicity. A tandem apoE peptide (100 nM) containing only the receptor binding region residues also eliminated the enhanced calcium signaling and neurotoxicity by apoE4. Taken together, our data demonstrate that differential effects of apoE3 and apoE4 on the calcium signaling in neurons correlate with their effect on neurotoxicity, which are secondary to receptor binding.