The Alzheimer's disease beta-amyloid peptide (Ap) is produced by excision f
rom the type 1 integral membrane glycoprotein amyloid precursor protein (AP
P) by the sequential actions of beta- and then gamma-secretases. Here we re
port that Asp 2, a novel transmembrane aspartic protease, has the key activ
ities expected of beta-secretase. Transient expression of Asp 2 in cells ex
pressing APP causes an increase in the secretion of the N-terminal fragment
of APP and an increase in the cell-associated C-terminal beta-secretase AP
P fragment. Mutation of either of the putative catalytic aspartyl residues
in Asp 2 abrogates the production of the fragments characteristic of cleava
ge at the beta-secretase site. The enzyme is present in normal and Alzheime
r's disease (AD) brain and is also found in cell lines known to produce A b
eta. Asp 2 localizes to the Golgi/endoplasmic reticulum in transfected cell
s and shows clear colocalization with APP in cells stably expressing the 75
1-amino-acid isoform of APP.