Inheritance of the ε4 allele of apolipoprotein E (APOE) is the strongest genetic risk factor associated with the sporadic form of Alzheimer’s disease (AD), whereas the rare APOE ε2 allele has the opposite effect. However, the mechanisms whereby APOE confers risk and protection remain uncertain. We used a gene transfer approach to bathe the cortex of amyloid plaque–bearing transgenic mice with virally expressed human APOE. We monitored amyloid-β (Aβ) with multiphoton imaging, in vivo microdialysis, and postmortem array tomography to study the kinetics of human APOE-mediated changes in Aβ-related neurotoxicity in a mouse model of AD. We observed that human APOE4 increased the concentrations of oligomeric Aβ within the interstitial fluid and exacerbated plaque deposition; the converse occurred after exposure to human APOE2. Peri-plaque synapse loss and dystrophic neurites were also worsened by APOE4 or attenuated by APOE2. Egress of Aβ from the central nervous system (CNS) into the plasma was diminished by APOE3 and APOE4 compared to APOE2, in accord with isoform-specific retention of Aβ in the CNS. Overall, our data show a differential effect of human APOE isoforms on amyloid deposition and clearance in transgenic mice and, more importantly, on Aβ-mediated synaptotoxicity. These results suggest that the APOE genetic risk is mediated by Aβ, and that therapeutic approaches aimed at decreasing APOE4, or increasing APOE2, may be beneficial in AD.