Alzheimer's disease is associated with synapse loss, memory dysfunction, and pathological accumulation of amyloid-β (Aβ) in plaques. However, an exclusively pathological role for Aβ is being challenged by new evidence for an essential function of Aβ at the synapse. Aβ protein exists in different assembly states in the central nervous system and plays distinct roles ranging from synapse and memory formation to memory loss and neuronal cell death. Aβ is present in the brain of symptom-free people where it likely performs important physiological roles. New evidence indicates that synaptic activity directly evokes the release of Aβ at the synapse. At physiological levels, Aβ is a normal, soluble product of neuronal metabolism that regulates synaptic function beginning early in life. Monomeric Aβ40 and Aβ42 are the predominant forms required for synaptic plasticity and neuronal survival. With age, some assemblies of Aβ are associated with synaptic failure and Alzheimer's disease pathology, possibly targeting the N-methyl-D-aspartic acid receptor through the nicotinic acetylcholine receptor, mitochondrial Aβ alcohol dehydrogenase, and cyclophilin D. But emerging data suggests a distinction between age effects on the target response in contrast to the assembly state or the accumulation of the peptide. Both aging and Aβ independently decrease neuronal plasticity. Our laboratory has reported that Aβ, glutamate, and lactic acid are each increasingly toxic with neuron age. The basis of the age-related toxicity partly resides in age-related mitochondrial dysfunction and an oxidative shift in mitochondrial and cytoplasmic redox potential. In turn, signaling through phosphorylated extracellular signal-regulated protein kinases is affected along with an age-independent increase in phosphorylated cAMP response element-binding protein. This review examines the long-awaited functional impact of Aβ on synaptic plasticity.