The retinoic acid receptor (RAR) α system plays a key role in the adult brain, participating in the homeostatic control of synaptic plasticity, essential for memory function. Here we show that RARα signalling is down-regulated by amyloid beta (Aβ), which inhibits the synthesis of the endogenous ligand, retinoic acid (RA). This results in the counteraction of a variety of RARα-activated pathways that are key in the aetiopathology of Alzheimer's disease (AD) but which can be reversed by an RARα agonist. RARα signalling improves cognition in the Tg2576 mice, it has an anti-inflammatory effect and promotes Aβ clearance by increasing insulin degrading enzyme and neprilysin activity in both microglia and neurons. In addition, RARα signalling prevents tau phosphorylation. Therefore, stimulation of the RARα signalling pathway using a synthetic agonist, by both clearing Aβ and counteracting some of its toxic effects, offers therapeutic potential for the treatment of AD.