There is no understanding of the role of amyloid beta protein (Ab or Abeta) in brain function and Alzheimer's disease. In the present study we attempted to dissect out the role for Abeta in the synaptic plasticity in adult rat ex vivo hippocampal slices. The prolonged incubation of slices in our experimental setting preserved basic synaptic physiology but abrogated tetanus induced long term potentiation (LTP). Peptide Abeta1-40 rescued LTP while cholesterol synthesis inhibition abolished the restorative action of the peptide. Our observation confirms that Abeta protein is a functional player in cholesterol neurochemical pathways and in synaptic structure-functional plasticity. The finding also supports our proposed hypothesis that the change in Abeta biochemistry in Alzheimer's disease is a functional phenomenon aiming to compensate impaired cholesterol dynamics and associated neurotransmission and synaptic plasticity failure.