Amyloid -protein, A, is normally produced in brain and is cleared by unknown mechanisms. In Alzheimer's disease (AD), A accumulates in plaque-like deposits and is implicated genetically in neurodegeneration. Here we investigate mechanisms for A degradation and A toxicity in vivo, focusing on the effects of A40, which is the peptide that accumulates in apolipoprotein E4-associated AD. Chronic intraventricular infusion of A40 into rat brain resulted in limited deposition and toxicity. Coinfusion of A40 with the cysteine protease inhibitor leupeptin resulted in increased extracellular and intracellular A immunoreactivity. Analysis of gliosis and TUNEL in neuron layers of the frontal and entorhinal cortex suggested that leupeptin exacerbated A40 toxicity. This was supported further by the neuronal staining of cathepsin B in endosomes or lysosomes, colocalizing with intracellular A immunoreactivity in pyknotic cells. Leupeptin plus A40 caused limited but significant neuronal phospho-tau immunostaining in the entorhinal cortex. Intriguingly, A40 plus leupeptin induced intracellular accumulation of the more toxic A, A42, in a small group of septal neurons. Leupeptin infusion previously has been reported to interfere with lysosomal proteolysis and to result in the accumulation of lipofuscin, dystrophic neurites, tau-and ubiquitinpositive inclusions, and structures resembling paired helical filaments. Coinfusion of A40 with the serine protease inhibitor aprotinin also increased diffuse extracellular deposition but reduced astrocytosis and TUNEL and was not associated with intracellular A staining. Collectively, these data suggest that an age or Alzheimer's-related defect in lysosomal/endosomal function could promote A deposition and DNA fragmentation in neurons and glia similar to that found in Alzheimer's disease.