Early detection of Alzheimer's disease (AD) has been challenging as current biomarkers are invasive and costly. Strong predictors of future AD diagnosis include lower volume of the hippocampus and entorhinal cortex, as well as the ɛ4 allele of the Apolipoprotein E gene (APOE) gene. Therefore, studying functions that are critically mediated by the hippocampus and entorhinal cortex, such as spatial memory, in APOE ɛ4 allele carriers, may be key to the identification of individuals at risk of AD, prior to the manifestation of cognitive impairments. Using a virtual navigation task developed in-house, specifically designed to assess spatial versus non-spatial strategies, the current study is the first to differentiate functional and structural differences within APOE ɛ4 allele carriers. APOE ɛ4 allele carriers that predominantly use non-spatial strategies have decreased fMRI activity in the hippocampus and increased atrophy in the hippocampus, entorhinal cortex, and fimbria compared to APOE ɛ4 allele carriers who use spatial strategies. In contrast, APOE ɛ4 allele carriers who use spatial strategies have grey matter levels comparable to non-APOE ɛ4 allele carriers. Furthermore, in a leave-one-out analysis, grey matter in the entorhinal cortex could predict navigational strategy with 92% accuracy.