Excessive cerebral accumulation of the 42-residue amyloid -protein (A) is an early and invariant step in the pathogenesis of Alzheimer's disease. Many studies have examined the cellular production of A from its membrane-bound precursor, including the role of the presenilin proteins therein, but almost nothing is known about how A is degraded and cleared following its secretion. We previously screened neuronal and nonneuronal cell lines for the production of proteases capable of degrading naturally secreted A under biologically relevant conditions and concentrations. The major such protease identified was a metalloprotease released particularly by a microglial cell line, BV-2. We have now purified and characterized the protease and find that it is indistinguishable from insulin-degrading enzyme (IDE), a thiol metalloendopeptidase that degrades small peptides such as insulin, glucagon, and atrial natriuretic peptide. Degradation of both endogenous and synthetic A at picomolar to nanomolar concentrations was completely inhibited by the competitive IDE substrate, insulin, and by two other IDE inhibitors. Immunodepletion of conditioned medium with an IDE antibody removed its A-degrading activity. IDE was present in BV-2 cytosol, as expected, but was also released into the medium by intact, healthy cells. To confirm the extracellular occurrence of IDE in vivo, we identified intact IDE in human cerebrospinal fluid of both normal and Alzheimer subjects. In addition to its ability to degrade A, IDE activity was unexpectedly found be associated with a time-dependent oligomerization of synthetic A at physiological levels in the conditioned media of cultured cells; this process, which may be initiated by IDE-generated proteolytic fragments of A, was prevented by three different IDE inhibitors. We conclude that a principal protease capable of down-regulating the levels of secreted A extracellularly is IDE.Converging lines of evidence support the hypothesis that progressive cerebral accumulation of the 40 -42-residue amyloid -proteins (As) 1 is an early, invariant, and necessary step in the pathogenesis of Alzheimer's disease (AD). As a result, there is growing interest in decreasing cerebral A levels as a therapeutic and preventative approach to the disease. A is generated by endoproteolysis of the -amyloid precursor protein (APP) and secreted constitutively by most mammalian cells throughout life. Whereas many studies have examined the proteolytic processing of APP and the mechanisms of A production, almost nothing is known about how A peptides are normally degraded and cleared following their secretion. We recently screened the conditioned media of several different cell lines for A-degrading activity and found that the principal such activity was conferred by a nonmatrix metalloprotease that was released by microglial cells and other cells and efficiently degraded both endogenous and synthetic A (1). The release of the protease from microglial cells was augmented by activating the cells with lipopolysa...