Cerebral deposition of amyloid β peptide (Aβ) is an early and critical feature of Alzheimer's disease. Aβ generation depends on proteolytic cleavage of the amyloid precursor protein (APP) by two unknown proteases: β- secretase and γ-secretase. These proteases are prime therapeutic targets. A transmembrane aspartic protease with all the known characteristics of β- secretase was cloned and characterized. Overexpression of this protease, termed BACE (for beta-site APP-cleaving enzyme) increased the amount of β- secretase cleavage products, and these were cleaved exactly and only at known β-secretase positions. Antisense inhibition of endogenous BACE messenger RHA decreased the amount of β-secretase cleavage products, and purified BACE protein cleaved APP-derived substrates with the same sequence specificity as β-secretase. Finally, the expression pattern and subcellular localization of BACE were consistent with that expected for β-secretase. Future development of BACE inhibitors may prove beneficial for the treatment of Alzheimer's disease.