The amyloid precursor protein (APP) is processed in the secretory and endoc
ytic pathways, where both the neuroprotective alpha-secretase-derived secre
ted APP (APPs alpha) and the Alzheimer's disease-associated beta-amyloid pe
ptide are generated. All three members of the FE65 protein family bind the
cytoplasmic domain of APP, which contains two sorting signals, MS and YENPT
Y. We show here that binding of APP to the C-terminal phosphotyrosine inter
action domain of hFE65L requires an intact YENPTY clathrin-coated pit inter
nalization sequence. To study the effects of the hFE65L/APP interaction on
APP trafficking and processing, we performed pulse/chase experiments and ex
amined APP maturation and secretion in an H4 neuroglioma cell line inducibl
e for expression of the hFE65L protein. Pulse/ chase analysis of endogenous
APP in these cells showed that the ratio of mature to total cellular APP i
ncreased after the induction of hFE65L, We also observed a threefold increa
se in the amount of APPs alpha recovered from conditioned media of cells ov
erexpressing hFE65L compared with uninduced controls. The effect of hFE65L
on the levels of APPs alpha secreted is due neither to a simple increase in
the steady-state levels of APP nor to activation of the protein kinase C-r
egulated APP secretion pathway. We conclude that the effect of hFE65L on AP
P processing is due to altered trafficking of APP as it transits through th
e secretory pathway.