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Abstract Background Apolipoprotein E4 (ApoE4) allele is the strongest genetic risk factor for late‐onset Alzheimer's disease, and it can aggravate depressive symptoms in non‐AD patients. However, the impact of ApoE4 on AD‐associated depression‐like behaviors and its underlying pathogenic mechanisms remain unclear. Methods This study developed a 5xFAD mouse model overexpressing human ApoE4 (E4FAD). Behavioral assessments and synaptic function tests were conducted to explore the effects of ApoE4 on cognition and depression in 5xFAD mice. Changes in peripheral and central lipid metabolism, as well as the levels of serotonin (5‐HT) and γ‐aminobutyric acid (GABA) neurotransmitters in the prefrontal cortex, were examined. In addition, the protein levels of 24‐dehydrocholesterol reductase/glycogen synthase kinase‐3 beta/mammalian target of rapamycin (DHCR24/GSK3β/mTOR) and postsynaptic density protein 95/calmodulin‐dependent protein kinase II/brain‐derived neurotrophic factor (PSD95/CaMK‐II/BDNF) were measured to investigate the molecular mechanism underlying the effects of ApoE4 on AD mice. Results Compared with 5xFAD mice, E4FAD mice exhibited more severe depression‐like behaviors and cognitive impairments. These mice also exhibited increased amyloid‐beta deposition in the hippocampus, increased astrocyte numbers, and decreased expression of depression‐related neurotransmitters 5‐HT and GABA in the prefrontal cortex. Furthermore, lipid metabolism disorders were observed in E4FAD, manifesting as elevated low‐density lipoprotein cholesterol and reduced high‐density lipoprotein cholesterol in peripheral blood, decreased cholesterol level in the prefrontal cortex, and reduced expression of key enzymes and proteins related to cholesterol synthesis and homeostasis. Abnormal expression of proteins related to the DHCR24/GSK3β/mTOR and PSD95/CaMK‐II/BDNF pathways was also observed. Conclusion This study found that ApoE4 overexpression exacerbates depression‐like behaviors in 5xFAD mice and confirmed that ApoE4 reduces cognitive function in these mice. The mechanism may involve the induction of central and peripheral lipid metabolism disorders. Therefore, modulating ApoE expression or function to restore cellular lipid homeostasis may be a promising therapeutic target for AD comorbid with depression. This study also provided a better animal model for studying AD comorbid with depression.