Alzheimer's disease is a devastating neurodegenerative disorder with no clear etiology and no cure. Familial Alzheimer's disease is caused by mutations in the Amyloid Precursor Protein, Presenilin-1 and Presenilin-2, and mutations in Presenilin-1 are the most common cause of the familial form of the disease. Mouse and non-neuronal models of Alzheimer's disease do not fully recapitulate the disease that is seen in humans, which limits our understanding of the underlying cause of disease. Additionally, Presenilin-1 has many reported functions, but it is unclear which functions contribute to neuronal dysfunction and ultimately neuronal cell death in the Alzheimer's brain. We developed an isogenic stem cell model of familial Alzheimer's disease to elucidate how Presenilin-1 mutations cause neuronal dysfunction. Using human neurons with a Presenilin-1 mutation, we have found that Preseniln-1 mutations are not simple loss-of-function mutations and that an increase in the more aggregation- prone amyloid-beta fragments does not necessarily lead to an increase in hyperphosphorylated tau. Furthermore, we have found that a Presenilin-1 mutation alters trafficking pathways of the amyloid precursor protein and lipoproteins, which could contribute to the phenotypes that are observed in Alzheimer's disease. These data implicate that the [gamma]-secretase function of Presenilin-1 not only affects Amyloid Precursor Protein processing, but also affects trafficking and endocytosis of lipoprotein receptors and their cargo. Finally, we characterized an APP FAD mutation in both iPSC-derived neurons from patients and isogenic cells where the mutation was introduced into a control genetic background. We found that this APP mutation affects APP processing and tau accumulation, which is in contrast to a Presenilin-1 mutation. These data suggest that APP and Presenilin-1 mutations are not equivalent with respect to early detectable phenotypes