The senile plaque is a pathologic hallmark of Alzheimer's disease (AD). Amyloid-β peptide (Aβ), the main constituent of senile plaques, is neurotoxic especially in its oligomeric form. Aβ is derived from the sequential cleavage of amyloid precursor protein (APP) by β- and γ-secretases in the amyloidogenic pathway. Alternatively, APP can be cleaved by α-secretases within the Aβ domain to produce neurotrophic and neuroprotective α-secretase-cleaved soluble APP (sAPPα) in the nonamyloidogenic pathway. Since APP and α-, β-, and γ-secretases are membrane proteins, APP processing should be highly dependent on the membrane composition and the biophysical properties of cellular membrane. In this review, we discuss the role of the biophysical properties of cellular membrane in APP processing, especially the effects of phospholipases A(2) (PLA(2)s), fatty acids, cholesterol, and Aβ on membrane fluidity in relation to their effects on APP processing.