Apolipoprotein (apo) E4 increases the risk and accelerates the onset of Alzheimer's disease (AD). However, the underlying mechanisms remain to be determined. We previously found that apoE undergoes proteolytic cleavage in AD brains and in cultured neuronal cells, resulting in the accumulation of carboxyl-terminaltruncated fragments of apoE that are neurotoxic. Here we show that this fragmentation is caused by proteolysis of apoE by a chymotrypsin-like serine protease that cleaves apoE4 more efficiently than apoE3. Transgenic mice expressing the carboxylterminal-cleaved product, apoE4(⌬272-299), at high levels in the brain died at 2-4 months of age. The cortex and hippocampus of these mice displayed AD-like neurodegenerative alterations, including abnormally phosphorylated tau (p-tau) and Gallyas silverpositive neurons that contained cytosolic straight filaments with diameters of 15-20 nm, resembling preneurofibrillary tangles. Transgenic mice expressing lower levels of the truncated apoE4 survived longer but showed impaired learning and memory at 6 -7 months of age. Thus, carboxyl-terminal-truncated fragments of apoE4, which occur in AD brains, are sufficient to elicit AD-like neurodegeneration and behavioral deficits in vivo. Inhibiting their formation might inhibit apoE4-associated neuronal deficits.H uman apolipoprotein (apo) E, a 34-kDa protein composed of 299 amino acids, occurs as three major isoforms, apoE2, apoE3, and apoE4 (1-4). ApoE4 is a major risk or susceptibility factor for Alzheimer's disease (AD) (5-7). The apoE4 allele, which is found in 40-65% of cases of sporadic and familial AD, increases the occurrence and lowers the age of onset of the disease (7,8).Biochemical, cell biological, and transgenic animal studies have suggested several potential mechanisms to explain apoE4's contribution to the pathogenesis of AD. These include the modulation of the deposition and clearance of amyloid  peptides and the formation of plaques (9-15), impairment of the antioxidative defense system (16), dysregulation of neuronal signaling pathways (17), disruption of cytoskeletal structure and function (18,19), and altered phosphorylation of tau and the formation of neurofibrillary tangles (NFTs) (20-23). However, the mechanisms of these apoE4-mediated detrimental effects are still largely unknown, and it is not known which are the primary effects and which are subsequent or downstream effects.The neuropathological hallmarks of AD include extracellular amyloid plaques and intracellular NFTs in the brain (24-27). The plaques consist primarily of amyloid  peptides (24-26). The NFTs are composed largely of the highly phosphorylated microtubule-associated protein tau (p-tau) (25) and, to a lesser extent, of phosphorylated neurofilaments (28, 29). Both amyloid plaques and NFTs contain apoE (5, 30, 31); however, the role of apoE in the pathogenesis of these two lesions is uncertain. Histopathological and behavioral analyses of transgenic mice expressing different human apoE isoforms in the brain have revealed clear evi...