The amyloid beta precursor protein (A beta PP), which plays a pivotal role in Alzheimer's disease (AD), can exist as either a membrane-bound or soluble protein. The former is cleaved at the level of the plasma membrane to generate the soluble form of the protein (A beta PPs). An alternative pathway exists, however, for the cleavage of A beta PP to generate a 40-42 amino acid peptide termed amyloid beta (A beta), either within the lysosomal or the endoplasmic reticulum/Golgi compartments of the cell. In AD, there is an increase in the ratio of the 42 amino acid form of the A beta peptide (A beta(42)) to A beta(40). The A beta(42) form is the more amyloidogenic form and has an increased potential to form the insoluble amyloid deposits characteristic of AD pathology. Studies on the familial form of the disease, with mutations in A beta PP or in the presenilin proteins, have confirmed an increase in A beta(42) generation associated with the early stages of the disease. This review will examine the factors that influence A beta PP processing, how they may act to modulate the biological effects of A beta PPs and A beta, and if they provide a viable target for therapeutic intervention to modify the rate of progression of the disease. (C) 2000 Elsevier Science Inc. All rights reserved.