SORL1 is strongly implicated in the pathogenesis of Alzheimer's disease (AD) through human genetic studies that point to an association of reduced SORL1 levels with higher risk for AD. To interrogate the role(s) of SORL1 in human brain cells, SORL1 null iPSCs were generated, followed by differentiation to neuron, astrocyte, microglia, and endothelial cell fates. Loss of SORL1 led to alterations in both overlapping and distinct pathways across cell types, with the greatest effects in neurons and astrocytes. Intriguingly, SORL1 loss led to a dramatic neuron-specific reduction in APOE levels. Further, analyses of iPSCs derived from a human aging cohort revealed a neuron-specific linear correlation between SORL1 and APOE RNA and protein levels, a finding validated in human post-mortem brain. Pathway analysis implicated intracellular transport pathways and TGF- β/SMAD signaling in the function of SORL1 in neurons. In accord, enhancement of retromer-mediated trafficking and autophagy rescued elevated phospho-tau observed in SORL1 null neurons but did not rescue APOE levels, suggesting that these phenotypes are separable. Stimulation and inhibition of SMAD signaling modulated APOE RNA levels in a SORL1-dependent manner. These studies provide a mechanistic link between two of the strongest genetic risk factors for AD.