Alzheimer's disease is the most frequent neurodegenerative disorder and the most common cause of dementia in the elderly. Diverse lines of evidence suggest that amyloid-β (Aβ) peptides have a causal role in its pathogenesis, but the underlying mechanisms remain uncertain. Here we discuss recent evidence that Aβ may be part of a mechanism controlling synaptic activity, acting as a positive regulator presynaptically and a negative regulator postsynaptically. The pathological accumulation of oligomeric Aβ assemblies depresses excitatory transmission at the synaptic level, but also triggers aberrant patterns of neuronal circuit activity and epileptiform discharges at the network level. Aβ-induced dysfunction of inhibitory interneurons likely increases synchrony among excitatory principal cells and contributes to the destabilization of neuronal networks. Strategies that block these Aβ effects may prevent cognitive decline in Alzheimer's disease. Potential obstacles and next steps toward this goal are discussed.