We described behavioral studies to highlight emotional processing deficits in Alzheimer’s disease (AD). The findings suggest prominent deficit in recognizing negative emotions, pronounced effect of positive emotion on enhancing memory, and a critical role of cognitive deficits in manifesting emotional processing dysfunction in AD. We reviewed imaging studies to highlight morphometric and functional markers of hippocampal circuit dysfunction in emotional processing deficits. Despite amygdala reactivity to emotional stimuli, hippocampal dysfunction conduces to deficits in emotional memory. Finally, the reviewed studies implicating major neurotransmitter systems in anxiety and depression in AD supported altered cholinergic and noradrenergic signaling in AD emotional disorders. Overall, the studies showed altered emotions early in the course of illness and suggest the need of multimodal imaging for further investigations. Particularly, longitudinal studies with multiple behavioral paradigms translatable between preclinical and clinical models would provide data to elucidate the time course and underlying neurobiology of emotion processing dysfunction in AD.