Accumulation of the amyloid-beta (Abeta) plaque in the cerebral cortex is a critical event in the pathogenesis of Alzheimer’s disease. Abeta peptide is generated by proteolytic cleavage of the beta-amyloid protein precursor (APP) at beta- and gamma-sites by two proteases. APP is first cleaved by beta-secretase, producing a soluble derivative of the protein and a membrane anchored 99-amino acid carboxy-terminal fragment (C99). The C99 fragment serves as substrate for gamma-secretase to generate the 4 kDa amyloid-beta peptide, which is deposited in the brains of all suffers of Alzheimer’s disease. The long-sought beta-secretase was recently identified by several groups independently and designated beta-site APP cleaving enzyme (BACE) and aspartyl protease 2 (Asp2). BACE/Asp2 is a novel transmembrane aspartic protease and colocalizes with APP.