We have used the yeast two-hybrid system to isolate cDNAs encoding proteins that specifically interact with the 42-aa beta-amyloid peptide (A beta), a major constituent of senile plaques in Alzheimer's disease, The carboxy terminus of alpha(2)-macroglobulin (alpha 2M), a proteinase inhibitor released in response to inflammatory stimuli, was identified as a strong and specific interactor of A beta, utilizing this system, Direct evidence for this interaction was obtained by co-immunoprecipitation of alpha 2M with A beta from the yeast cell, and by formation of SDS-resistant A beta complexes in polyacrylamide gels by using synthetic A beta and purified alpha 2M, The association of A beta with alpha 2M and various purified amyloid binding proteins was assessed by employing a method measuring protein-protein interactions in liquid phase, The dissociation constant by this technique for the alpha 2M-A beta association using labeled purified proteins was measured (K-d = 350 nM), Electron microscopy showed that a 1:8 ratio of alpha 2M to A beta prevented fibril formation in solution; the same ratio to A beta of another acute phase protein, alpha(1)-antichymotrypsin, was not active in preventing fibril formation in vitro, These results were corroborated by data obtained from an in vitro aggregation assay employing Thioflavine T, The interaction of alpha 2M with A beta suggests new pathway(s) for the clearance of the soluble amyloid peptide.