Alternative processing of the beta-amyloid precursor protein (beta APP) can result in liberation of either secreted forms of beta APP (APP(s)s), which may play roles in neuronal plasticity and survival, or amyloid beta-peptide (A beta p), which can be neurotoxic. In rat hippocampal cell cultures A beta 1-40 caused a time- and concentration-dependent reduction in neuronal survival. APP(s)695 and APP(s)751 significantly reduced A beta-induced injury in a concentration-dependent manner. A beta B caused an elevation of intracellular calcium levels ([Ca2+](i)) which was significantly attenuated by APP(s)s. A beta also caused induction of reactive oxygen species (measured using the oxidation-sensitive fluorescent dye 2,7-dichlorofluorescin) which was also attenuated by APP(s)s, A beta-induced neurotoxicity and elevations of [Ca2+](i) were attenuated by vitamin E, suggesting the involvement of free radicals in A beta-induced loss of calcium homeostasis and neuronal injury. The APP(s)s protected neurons against oxidative injury caused by exposure to iron. Taken together, the data indicate that A beta kills neurons by causing free radical production and increased [Ca2+](i.) APP(s)s can protect neurons against such free radical- and Ca2+-mediated injury. These findings support the hypothesis that altered processing of beta APP contributes to neuronal injury in Alzheimer's disease. (C) 1994 Academic Press, Inc.