Alzheimer's disease (AD), the most common chronic and progressive neurodegenerative disorder, is characterized by extracellular deposits of amyloid β-peptides (Aβ) and intracellular deposits of hyperphosphorylated tau (phospho-tau) protein. Ceramides, the major molecules of sphingolipid metabolism and lipid second messengers, have been associated with AD progression and pathology via Aβ generation. Enhanced levels of ceramides directly increase Aβ through stabilization of β-secretase, the key enzyme in the amyloidogenic processing of Aβ precursor protein (APP). As a positive feedback loop, the generated oligomeric and fibrillar Aβ induces a further increase in ceramide levels by activating sphingomyelinases that catalyze the catabolic breakdown of sphingomyelin to ceramide. Evidence also supports important role of ceramides in neuronal apoptosis. Ceramides may initiate a cascade of biochemical alterations, which ultimately leads to neuronal death by diverse mechanisms, including depolarization and permeabilization of mitochondria, increased production of reactive oxygen species (ROS), cytochrome c release, Bcl-2 depletion, and caspase-3 activation, mainly by modulating intracellular signalling, particularly along the pathways related to Akt/PKB kinase and mitogen-activated protein kinases (MAPKs). This review summarizes recent findings related to the role of ceramides in oxidative stress-driven neuronal apoptosis and interplay with Aβ in the cascade of events ending in neuronal degeneration.