Phospholipid transfer protein (PLTP) plays a pivotal role in cellular lipid efflux and modulation of lipoprotein metabolism. PLTP is distributed widely in the central nervous system (CNS), is synthesized by glia and neurons, and is active in cerebrospinal fluid (CSF). The aims of this study were to test the hypothesis that patients with Alzheimer's disease (AD) have altered PLTP‐mediated phospholipid transfer activity in CSF, and to examine the potential relationship between PLTP activity and apolipoprotein E (apoE) levels in CSF. We assessed PLTP activity and apoE concentration in CSF of patients with probable AD (n = 50), multiple sclerosis (MS; n = 9), other neurologic diseases (n = 21), and neurologically healthy controls (n = 40). PLTP activity in AD was reduced compared to that in controls (P < 0.001), with approximately half of the AD patients with PLTP activity values below all controls. Patients with MS had lower PLTP activity than AD patients (P < 0.001). PLTP activity was highly correlated with PLTP mass, as estimated by Western blot (r = 0.006; P < 0.01). CSF PLTP activity positively correlated with apoE concentration in AD (R = 0.435; P = 0.002) and controls (R = 0.456; P = 0.003). Anti‐apoE immunoaffinity chromatography and Western blot analyses indicated that some CSF PLTP is associated with apoE‐containing lipoproteins. Exogenous addition of recombinant PLTP to primary human astrocytes significantly increased apoE secretion to the conditioned medium. The findings of reduced PLTP activity in AD CSF, and the observation that PLTP can influence apoE secretion in astrocytes suggest a potential link between alterations in the brain lipid metabolism and AD pathogenesis. © 2005 Wiley‐Liss, Inc.