Mitochondrial dysfunction is a hallmark of beta-amyloid (Abeta)-induced neuronal toxicity in Alzheimer's disease (AD). Here, we demonstrate that Abeta-binding alcohol dehydrogenase (ABAD) is a direct molecular link from Abeta to mitochondrial toxicity. Abeta interacts with ABAD in the mitochondria of AD patients and transgenic mice. The crystal structure of Abeta-bound ABAD shows substantial deformation of the active site that prevents nicotinamide adenine dinucleotide (NAD) binding. An ABAD peptide specifically inhibits ABAD-Abeta interaction and suppresses Abeta-induced apoptosis and free-radical generation in neurons. Transgenic mice overexpressing ABAD in an Abeta-rich environment manifest exaggerated neuronal oxidative stress and impaired memory. These data suggest that the ABAD-Abeta interaction may be a therapeutic target in AD.