According to the beta-amyloid cascade hypothesis, the accumulation of beta-amyloid (Abeta) deposits as amyloid plaques in the patient's brain is the primary event in the pathogenesis of Alzheimer's disease (AD). Other neuropathological changes such as neurofibrillary tangles (NFTs), synaptic degeneration and neuronal cell loss are secondary and appear as a consequence of Abeta deposition. Abeta is generated during the proteolytic processing of the beta-amyloid precursor protein (APP). The endoproteolysis of APP is catalyzed by alpha-, beta-, and gamma-secretases. The alpha-secretase pathway releases non-amyloidogenic products: sAPPbeta, p3 and C83 peptides. In the beta-secretase pathway, apart from the sAPPalpha and C99 fragments also beta-amyloid peptides: Abeta40 and/or Abeta42 are generated. Abeta42 is neurotoxic and more hydrophobic than Abeta40, thus it has stronger tendency to oligomerize and aggregate. The imbalance between Abeta production and Abeta clearance is the basis for the formation of amyloid plaques. The majority of known APP and presenilin mutations responsible for familial early onset AD affect APP processing causing overproduction of Abeta, especially Abeta42. Both extracellular and intracellular accumulation of Abeta initiates a cascade of the following events leading to the neurodegeneration: synaptic and neuritic injury, microglial and astrocytic activation (inflammatory response), altered neuronal ionic homeostasis, oxidative damages, changes of kinases/phosphatases activities, formation of NFTs, and finally cell death. In this paper, we reviewed recent findings supporting the presented hypothesis.