Alzheimer's disease (AD) is poised to become the most serious healthcare issue of our generation. The leading theory of AD pathophysiology is the Amyloid Cascade Hypothesis, and clinical trials are now proceeding based on this hypothesis. Here, we review the original evidence for the Amyloid Hypothesis, which was originally focused on the extracellular deposition of beta amyloid peptides (Aβ) in large fibrillar aggregates, as well as how this theory has been extended in recent years to focus on highly toxic small soluble amyloid oligomers. We will also examine emerging evidence that Aβ may actually begin to accumulate intracellularly in lysosomes, and the role for intracellular Aβ and lysosomal dysfunction may play in AD pathophysiology. Finally, we will review the clinical implications of these findings.