Innate immunity provides the first line of defense by recognizing pathogen-associated microbial patterns and inducing key co-stimulatory molecules and cytokines, which activate the mechanisms of the adaptive immune response. Innate immune cells perform phagocytosis, which can clear pathogens and tissue waste products but may also contribute to tissue injury due to harmful side effects of inflammation. Genetic studies of APOE4, cytokine polymorphisms and overexpression of inflammatory genes suggest that chronic inflammation may have adverse effects in patients with sporadic Alzheimer's disease. However, a vaccine against amyloid-beta induced beneficial clearance of amyloid-beta deposits, possibly through Fc receptor-mediated stimulation of microglial and macrophage uptake. A reconciliation of these two pathogenetic mechanisms is crucial to future progress in immune diagnosis and effective therapy. This may be possible by extending our recent observations suggesting that phagocytosis of amyloid-beta by macrophages is excellent in normal subjects but is deficient in most AD patients. Thus increased proinflammatory cytokine levels and activated microglia and macrophages in patients may be compensatory for defective clearance of amyloid-beta. Consequently, therapeutic interventions that increase phagocytosis of amyloid-beta might decrease brain inflammation as well as reduce inflammation-induced neurodegeneration. Finally, peripheral blood leukocytes are a superior model system for investigation of innate immune dysfunction in Alzheimer's disease.