Beta-amyloid precursor protein (APP) has been reported to be expressed in the CNS from the early stages of development. However, the functional role of APP during early development remains unclear. In the present study, we found that the secreted form of APP (sAPP) significantly enhanced proliferation of neural stem cells. Cells were prepared from 13-day embryonic rat neocortex, which was dissected with a Pasteur pipette to make cell clusters. After 12 h of cultivation in the medium without serum, cells around the centre of the cluster were still nestin-positive proliferative cells, i.e. neural stem cells. To determine whether the proliferation of cells was regulated by sAPP, cultures were treated with recombinant sAPP695, the secreted form of human APP695 produced by yeast. Both DNA synthesis and expression of proliferating cell nuclear antigen markedly increased after 5 h of sAPP695 addition. The enhancement of DNA synthesis by sAPP695 stimulation was blocked by the 22C11 monoclonal antibody specific for the amino-terminal region of sAPP. Then, we examined the effect of the amino-terminal fragment of sAPP and the epitope peptide of 22C11 antibody, and found that both of them also promoted DNA synthesis, suggesting that the amino-terminal region of sAPP is responsible for the biological activity. Our findings indicate the possibility that sAPP enhances proliferation of neural stem cells in vivo and plays an important role during the early CNS development.