Alzheimer’s disease (AD) is the most common form of age-related dementia, and the number of patients is increasing every year. However, the lack of research models makes it difficult to understand the underlying mechanism of AD progression. Recent advances in stem cell technologies have opened up a new in vitro platform to study AD, by successful differentiation of the human stem cells to mimic the various pathophysiological conditions in AD including amyloid aggregation and neuroinflammation. In this chapter, we review the hypotheses which explain AD pathogenesis and provide an up-to-date overview of various methods to generate stem cell-derived AD neural cells, as well as their applications for AD modeling.