The ɛ4 allele of the apolipoprotein E gene (APOE), which translates to the APOE4 isoform, is the strongest genetic risk factor for late-onset Alzheimer disease (AD). Within the CNS, APOE is produced by a variety of cell types under different conditions, posing a challenge for studying its roles in AD pathogenesis. However, through powerful advances in research tools and the use of novel cell culture and animal models, researchers have recently begun to study the roles of APOE4 in AD in a cell type-specific manner and at a deeper and more mechanistic level than ever before. In particular, cutting-edge omics studies have enabled APOE4 to be studied at the single-cell level and have allowed the identification of critical APOE4 effects in AD-vulnerable cellular subtypes. Through these studies, it has become evident that APOE4 produced in various types of CNS cell - including astrocytes, neurons, microglia, oligodendrocytes and vascular cells - has diverse roles in AD pathogenesis. Here, we review these scientific advances and propose a cell type-specific APOE4 cascade model of AD. In this model, neuronal APOE4 emerges as a crucial pathological initiator and driver of AD pathogenesis, instigating glial responses and, ultimately, neurodegeneration. In addition, we provide perspectives on future directions for APOE4 research and related therapeutic developments in the context of AD.