Apolipoprotein E (APOE) is a cholesterol transport protein and an isoform-specific major risk factor for neurodegenerative diseases. The lipoprotein receptors that bind APOE have recently been recognized as pivotal components of the neuronal signalling machinery. The interaction between APOE receptors and one of their ligands, reelin, allows them to function directly as signal transduction receptors at the plasma membrane to control not only neuronal positioning during brain development, but also synaptic plasticity in the adult brain. Here, we review the molecular mechanisms through which APOE, cholesterol, reelin and APOE receptors control synaptic functions that are essential for cognition, learning, memory, behaviour and neuronal survival.