Previous studies have demonstrated that NT2N neurons derived from a human embryonal carcinoma cell line (NT2) constitutively process the endogenous wild-type beta-amyloid precursor protein (APP) to amyloid beta peptide in an intracellular compartment. These studies indicate that other proteolytic fragments generated by intracellular processing must also be present in these cells. Here we show that the NH2-terminal fragment of APP generated by beta-secretase cleavage (APP beta) is indeed produced from the endogenous full length APP (APP(FL)). Pulse-chase studies demonstrated a precursor-product relationship between APP(FL) and APP beta as well as intracellular and secreted APP beta fragments, In addition, trypsin digestion of intact NT2N cells at 4 degrees C did not abolish APP beta recovered from the eel lysates. Furthermore, the production of intracellular APP beta from wild-type APP appears to be a unique characteristic of postmitotic neurons, since intracellular APP beta was not detected in several non-neuronal cell lines. Significantly, production of APP beta occurred even when APP was retained in the ER/intermediate compartment by inhibition with brefeldin A, incubation at 15 degrees C, or by expression of exogenous APP bearing the dilysine ER retrieval motif.