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