The peripheral anionic site of acetylcholinesterase lies at the entrance to the active site gorge. It is composed of five residues (Tyr 70, Asp 72, Tyr 121, Trp 279 and Tyr 334; Torpedo numbering); associated with it are a number of surface loops, conferring a high degree of conformational flexibility on the area. The site is involved in the allosteric modulation of catalysis at the active centre and is the target of various anti-cholinesterases. It is also implicated in a number of non-classical functions, in particular, amyloid deposition, cell adhesion and neurite outgrowth. A number of peptide and protein ligands for the site have been identified. In this review, the structure and multiple functions of the peripheral anionic site are discussed, together with its potential as a target in rational drug design for the development of novel and improved inhibitors and of therapeutics for the treatment of neural cancers, nerve regeneration and neurodegenerative disorders such as Alzheimer's disease.