Utilizing structure-based techniques and solid-phase synthesis, statine-based tetrapeptide BACE inhibitors were designed and synthesized using a heptapeptide BACE transition-state mimetic, 1, as the starting point. Structure-activity relationship studies at the P-3, P-2, and P-2' positions as well as the N-terminal capping group on scaffold 5 led to the discovery of potent inhibitors 27, 32, and 34 (IC50 < 100 nM). In addition, computational analysis and the X-ray structure of BACE-inhibitor 38 are discussed. (C) 2003 Elsevier Ltd. All rights reserved.