The ε4 allele of the apolipoprotein E gene (APOE4) is a strong genetic risk factor for Alzheimer’s disease (AD) and several other neurodegenerative conditions, including Lewy body dementia (LBD). The three APOE alleles encode protein isoforms that differ from one another only at amino acid positions 112 and 158: apoE2 (C112, C158), apoE3 (C112, R158), and apoE4 (R112, R158). Despite progress, it remains unclear how these small amino acid differences in apoE sequence among the three isoforms lead to profound effects on aging and disease-related pathways. Here, we propose a novel “ApoE Cascade Hypothesis” in AD and age-related cognitive decline, which states that the biochemical and biophysical properties of apoE impact a cascade of events at the cellular and systems levels, ultimately impacting aging-related pathogenic conditions including AD. As such, apoE-targeted therapeutic interventions are predicted to be more effective by addressing the biochemical phase of the cascade.