Endosomal system dysfunction within neurons is a prominent early feature of Alzheimer disease (AD) pathology. Multiple AD risk factors are regulators of endocytosis and are known to cause hyper-activity of the early-endosome small GTPase rab5, resulting in neuronal endosomal pathway disruption and cholinergic neurodegeneration. Adaptor protein containing Pleckstrin homology domain, Phosphotyrosine binding domain, Leucine zipper motif (APPL1), an important rab5 effector protein and signaling molecule, has been shown in vitro to interface between endosomal and neuronal dysfunction through a rab5-activating interaction with the BACE1-generated C-terminal fragment of amyloid precursor protein (APP-{beta}CTF), a pathogenic APP fragment generated within endosomal compartments. To understand the contribution of APPL1 to AD-related endosomal dysfunction in vivo, we generated a transgenic mouse model over-expressing human APPL1 within neurons (Thy1-APPL1 mice). Strongly supporting the important endosomal regulatory roles of APPL1 and their relevance to AD etiology, Thy1-APPL1 mice develop enlarged neuronal early endosomes and increased synaptic endocytosis due to increased rab5 activation. We demonstrate pathophysiologic consequences of APPL1 overexpression, including functional changes in hippocampal long-term potentiation (LTP) and long-term depression (LTD), degeneration of large projection cholinergic neurons of the basal forebrain, and impaired hippocampal-dependent memory. Our evidence shows that neuronal APPL1 elevation modeling its functional increase in the AD brain induces a cascade of AD-related pathological effects within neurons, including early endosome anomalies, synaptic dysfunction, and selective neurodegeneration. Our in vivo model highlights the contributions of APPL1 to the pathobiology and neuronal consequences of early endosomal pathway disruption and its potential value as a therapeutic target.