This Phase II, multicenter, randomized, double-blind, parallel-group, placebo-controlled study will evaluate the efficacy and safety of RO4602522 in participants with moderate severity Alzheimer's disease. Participants who are taking background therapy of acetylcholinesterase inhibitors (AChEI) alone or in combination with memantine for at least 4 months before screening will be randomized to receive either one of two doses of RO4602522 or placebo for 12 months.

Inclusion Criteria:

• Probable Alzheimer disease, based on the National Institute of Neurological and Communicative Disorders and Stroke (NINCDS)/Alzheimer's Disease and Related Disorders Association (ADRDA) and Diagnostic and Statistical Manual of Mental Disorders-Fourth Edition (DSM-IV-TR) criteria
• Mini-Mental State Exam (MMSE) score at screening between 13 and 20, inclusive
• Body mass index (BMI) between 18 and 36 kilograms per square meter (kg/m^2) (inclusive) at screening
• Modified Hachinski Ischemia Score of less than or equal to (</=) 4
• Participants with Cornell Scale for Depression in Dementia (CSDD) scores </= 13 at screening
• Receiving treatment with donepezil, rivastigmine, galantamine or any AChEIs in combination with memantine for at least 4 months before screening, with their dose and formulation stabilized at least 3 months before screening. All formulation and dosages are allowed except donezepil 23 mg (alone or in combination)
• Females of childbearing potential must have a negative pregnancy test and must agree to use effective contraception
• Generally healthy and ambulatory or ambulatory-aided (i.e., walker or cane)
• Have a reliable caregiver or some other identified responsible person who has frequent contact with the participant

Exclusion Criteria:

• Any neurological or psychiatric condition that may occur currently or during the course of the study that can impair cognition or functioning that is not associated with Alzheimer's disease
• Background of mental retardation
• Uncontrolled behavioral symptoms incompatible with compliance or evaluability
• Alcohol and/or substance abuse or dependence (DSM-IV-TR) in the past 2 years, except nicotine use which is allowed. However, smokers treated with nicotine replacement therapy or bupropion are excluded
• Unstable or poorly controlled hypertension as assessed by the investigator regardless of whether or not the participant is taking antihypertensive medications
• Unstable or clinically significant cardiovascular disease that could be expected to progress, recur, or change during study period to such an extent that it could bias the assessment of the clinical or mental status of the participant
• Inadequate hepatic, renal or thyroid function
• Positive for hepatitis B, hepatitis C or human immunodeficiency virus (HIV) infection
• Poorly controlled diabetes (glycosylated hemoglobin [HbA1c] greater than or equal to [>/=] 9 percent at screening)
• Requiring nursing home care. Participants living in assisted living facilities are allowed if a reliable caregiver is available (see inclusion criteria)
• Current treatment for Alzheimer's disease other than those listed in inclusion criteria
• Participation at any time in an active Alzheimer's disease vaccine study
• Participation in a passive Alzheimer's disease immunization study less than 1 year before screening except for a) participants where documented medical history indicate that they were randomized to the placebo group in these studies, b) participants treated with bapineuzumab where a 6-month exclusion period applies
• Recent (\