Amyloid beta -protein (A beta) has been implicated as an early and essential factor in the pathogenesis of Alzheimer's disease. Although its cellular production has been studied extensively, little is known about A beta clearance. Recently, insulin-degrading enzyme (IDE), a 110-kDa metalloendopeptidase, was found to degrade both endogenously secreted and synthetic A beta peptides. Surprisingly, IDE-mediated proteolysis of [I-125]A beta>(*) over bar * (1-40) in microglial cell-culture media was accompanied by the formation of I-125-labelled peptides with higher apparent molecular masses, raising the possibility that the degradation products act as 'seeds' for A beta oligomerization. To directly address the role of IDE in AP degradation and oligomerization, we investigated the action of purified recombinant wild-type and catalytically inactive IDEs. Our data demonstrate that (i) IDE alone is sufficient to cleave purified A beta that is either unlabelled, iodinated or S-35- Labelled; (ii) the initial cleavage sites are His(14)-Gln(15), Phe(19)-Phe(20) and Phe(20)-Ala(21); and (iii) incubation of IDE with [125I]AB, but not with [S-35]-A beta, leads to the formation of slower migrating species on gels. Since iodination labels N-terminal fragments of A beta, and 35S labels C-terminal products, we analysed unlabelled synthetic fragments of A beta and determined that only the N-terminal fragments migrate with anomalously high molecular mass. These results indicate that IDE alone is sufficient to degrade A beta at specific sites, and that its degradation products do not promote oligomerization of the intact A beta peptide.