The apolipoprotein E gene (APOE) is the strongest genetic risk factor for late-onset Alzheimer's disease (AD), yet the expression of APOE is not clearly understood. For example, it is unclear whether AD patients have elevated or decreased APOE expression or why the correlation levels of APOE RNA and the ApoE protein differ across studies. Likewise, APOE has a single CpG island (CGI) that overlaps with its 3'-exon, and this CGI's effect is unknown. We previously reported that the APOE CGI is highly methylated in human postmortem brain (PMB) and that this methylation is altered in AD frontal lobe. In this study, we comprehensively characterized APOE RNA transcripts and correlated levels of RNA expression with DNA methylation levels across the APOE CGI. We discovered the presence of APOE circular RNA (circRNA) and found that circRNA and full-length mRNA each constitute approximately one third of the total APOE RNA, with truncated mRNAs likely constituting some of the missing fraction. All APOE RNA species demonstrated significantly higher expression in AD frontal lobe than in control frontal lobe. Furthermore, we observed a negative correlation between the levels of total APOE RNA and DNA methylation at the APOE CGI in the frontal lobe. When stratified by disease status, this correlation was strengthened in controls but not in AD. Our findings suggest a possible modified mechanism of gene action for APOE in AD that involves not only the protein isoforms but also an epigenetically regulated transcriptional program driven by DNA methylation in the APOE CGI.