The three-year project by researchers at the University of Edinburgh will investigate the causes of memory decline in those with the condition.
The study has been launched thanks to £450,000 in funding from Alzheimer's Research UK and the Scottish Government, and the team will collaborate with researchers in the US.
Scientists will use cutting-edge techniques to study a new model of Alzheimer's, as well as donated brain samples from people who died with the disease and will focus on the molecular mechanisms that cause deterioration of synapses - connections between nerve cells that allow them to communicate with each other.
Lead researcher Dr Tara Spires-Jones, a Reader and Chancellor's Fellow in the Centre of Cognitive and Neural Systems, said: "We are thrilled to have secured this funding, which will allow us to gain a much clearer understanding of the mechanisms at play in Alzheimer's disease.
"There is still much we need to learn about the basic biology of Alzheimer's in order to understand how to treat the disease, and the knowledge we gain from our research should inform clinical trials for much-needed new treatments.
"Our project will take a very collaborative approach and I'm pleased that we'll be able to work closely with scientists from other institutions to move our research forward."
Public Health Minister Michael Matheson said: "This Scottish Government recognises the future challenges that we face in relation to dementia.
"That is why earlier this year we published our second three-year National Dementia Strategy which will further improve diagnosis rates, transform the quality of post-diagnostic support and take forward a national action plan on improving care for people with dementia in hospitals."