AbstractBackgroundApolipoprotein E (APOE) is the strongest genetic risk factor for late‐onset Alzheimer's disease (AD). APOE ɛ4/ɛ4 homozygosity increases AD risk by >15‐fold. Although its association with AD is well‐established, the mechanisms underlying this genetic risk on particular brain cell types remains elusive. We hypothesized that the APOE ε4/ε4 genotype contributes to disease risk through cell autonomous mechanisms in glia.MethodWe used three models: human induced pluripotent stem cells (hiPSCs), post‐mortem brains and human APOE‐targeted replacement (TR) mice. We have differentiated microglia, astrocytes, cortical neurons and brain microvascular endothelial cells from hiPSC derived from non‐isogenic and isogenic cohort of cells selected based on APOE genotype. We also deconvoluted AD vs control whole brain transcriptome by cell types to confirm the findings from iPSCs in human brain tissue. Primary mouse microglia and astrocytes were purified from APOE‐TR mice. Global transcriptomic analyses were performed to identify APOE ɛ4 impact on particular cell type and to compare species differences. We validated predicted functional pathways in vitro using isogenic hiPSC lines using gas chromatograph‐mass spectrometry, fluorescently tagged cholesterol efflux assay, protein biochemistry and Luminex multiplex immunoassay.ResultGene set enrichment and pathway analyses of whole transcriptome profiles showed that APOE ε4 is associated with dysregulation of cholesterol homeostasis in human glia but not mouse astrocytes and microglia. Elevated matrisome signaling associated with chemotaxis, glial activation and lipid biosynthesis in APOE ε4 mixed neuron/astrocyte cultures parallels altered pathways uncovered in cell‐type deconvoluted transcriptomic data from APOE ε4 glia and AD post‐mortem brains. Experimental validation of the transcriptomic findings showed that isogenic APOE ε4 is associated with increased lysosomal cholesterol levels and decreased cholesterol efflux, demonstrating decoupled lipid metabolism. APOE ε4 glia also secrete higher levels of proinflammatory chemokines, cytokines and growth factors, indicative of glial activation.ConclusionThus, CNS cell type based models allowed us to elucidate APOE ε4‐driven cell autonomous effects; APOE ε4 induces human glia‐specific dysregulation in reactivity of the cells and associated lipid metabolism that may initiate AD risk.