Cholinergic pathways serve important functions in learning and memory processes, and deficits in cholinergic transmission occur in Alzheimer disease (AD). A subset of muscarinic cholinergic receptors are linked to G-proteins that activate phospholipase C, resulting in the liberation of inositol trisphosphate and Ca2+ release from intracellular stores, We now report that amyloid beta-peptide (A beta), which forms plaques in the brain in AD, impairs muscarinic receptor activation of C proteins in cultured rat cortical neurons, Exposure of rodent fetal cortical neurons to A beta 25-35 and A beta L-40 resulted in a concentration and time-dependent attenuation of Carbachol-induced GTPase activity without affecting muscarinic receptor ligand binding parameters, Downstream events in the signal transduction cascade were similarly attenuated by A beta. Carbachol-induced accumulation of inositol phosphates (IP, IP2, IP3, and IP4) was decreased and calcium imaging studies revealed that carbachol-induced release of calcium was severely impaired in neurons pretreated with A beta. Muscarinic cholinergic signal transduction was disrupted with subtoxic levels of exposure to A beta. The effects of A beta on carbachol-induced GTPase activity and calcium release were attenuated by antioxidants, implicating free radicals in the mechanism whereby A beta induced uncoupling of muscarinic receptors, These data demonstrate that A beta disrupts muscarinic receptor coupling to G proteins that mediate induction of phosphoinositide accumulation and calcium release, findings that implicate A beta in the impairment of cholinergic transmission that occurs in AD.