Neprilysin (NEP) is a rate-limiting amyloid  peptide (A)-degrading enzyme in the brain. We demonstrated previously that overexpression of neprilysin in primary cortical neurons remarkably decreased not only extracellular but also intracellular A levels. To investigate the subcellular compartments where neprilysin degrades A most efficiently, we expressed neprilysin chimeric proteins containing various subcellular compartment-targeting domains in neurons. Sec12-NEP, -galactoside ␣2,6-sialyltransferase-NEP, transferrin receptor-NEP, and growth-associated protein 43-NEP were successfully sorted to the endoplasmic reticulum, trans-Golgi network, early/recycling endosomes, and lipid rafts, respectively. We found that intracellularly, wild-type neprilysin and all the chimeras showed equivalent A40-degrading activities. A40 was more effectively cleared than A42, and this tendency was greater for intracellular A than for extracellular A. Wild-type and trans-Golgi network-targeted ST-NEP cleared more intracellular A42 than the other chimeras. Wild-type neprilysin cleared extracellular A more effectively than any of the chimeras, among which endoplasmic reticulum-targeted Sec12-NEP was the least effective. These observations indicate that different intracellular compartments may be involved in the metabolism of distinct pools of A (A40 and A42) to be retained or recycled intracellularly and to be secreted extracellularly, and that the endogenous targeting signal in wildtype neprilysin is well optimized for the overall neuronal clearance of A.Accumulation of amyloid  peptide (A) 1 in the brain is a triggering event leading to the pathological cascade of Alzheimer's disease (AD) (1). A is a physiological peptide, the steadystate level of which is strictly determined through a balance between the anabolic and catabolic activities. Changes in the metabolic balance are closely associated with A accumulation, because an increase in A anabolic activity causes A deposition in almost all cases of familial AD (2, 3). In sporadic AD brains, where elevation of anabolism seems to be rare, a reduction in catabolic activity involving A-degrading enzyme(s) has been a candidate cause that may account for A accumulation. Recently, several proteases, such as neprilysin (4), insulindegrading enzyme (5, 6), and endothelin-converting enzymes 1 and 2 (7), have been identified as A-degrading enzymes in the brain by reverse genetic studies. Deficiencies of these proteases were associated with an elevation of brain A levels in each case, demonstrating that a reduction in the catabolic activity will also contribute to AD development by promoting A accumulation. Although these peptidases are likely to contribute to overall A clearance in the brain by complementing each other in a subcellular, cell type-and/or brain region-specific manner, neprilysin seems to play the primary role among all the A-degrading enzymes thus far examined (8,9). It is also important that the in vivo action of neprilysin in the brain is quite sel...