Metabolic dysfunction is one of the early features in Alzheimer's disease (AD) affected brain. Amyloid-beta peptide (Abeta), a major peptide deposited in neuritic plaques, has been considered as an important initiating molecule in the pathogenesis of AD. However, the pathogenic role of Abeta remains to be determined. Here, we review current studies showing that progressive accumulation of Abeta occurs within the mitochondria of both transgenic mice overexpressing mutant Abeta peptide precursor protein and autopsied brains from AD patients. Interaction of Abeta with Abeta-binding alcohol dehydrogenase (ABAD), a short-chain alcohol dehydrogenase in the mitochondrial matrix, leads to mitochondrial dysfunction evidenced by increased reactive oxygen species generation, mitochondrial membrane permeability formation and caspase-3-like activity induction, and decreased activities of the Krebs cycle. These effects can be blocked by intracellular transduction of the ABAD decoy peptide. We hypothesize that Abeta-induced and mitochondria-dependent cytotoxic pathways might play an important role in AD pathogenesis and could be a potential therapeutic target.