Ubiquitin-dependent proteolysis is a major mechanism that downregulates misfolded proteins or those that have finished a programmed task. In the last two decades, neddylation has emerged as a major regulatory pathway for ubiquitination. Central to the neddylation pathway is the amyloid precursor protein (APP)-binding protein APP-BP1, which together with Uba3, plays an analogous role to the ubiquitin-activating enzyme E1 in nedd8 activation. Activated nedd8 covalently modifies and activates a major class of ubiquitin ligases called Cullin-RING ligases (CRLs). New evidence suggests that neddylation also modifies Type-1 transmembrane receptors such as APP. Here we review the functions of neddylation and summarize evidence suggesting that dysfunction of neddylation is involved in Alzheimer's disease.