BACE1 activity is significantly increased in the brains of Alzheimer's disease patients, potentially contributing to neurodegeneration. The voltage-gated sodium channel (Na(v)1) beta2-subunit (beta2), a type I membrane protein that covalently binds to Na(v)1 alpha-subunits, is a substrate for BACE1 and gamma-secretase. Here, we find that BACE1-gamma-secretase cleavages release the intracellular domain of beta2, which increases mRNA and protein levels of the pore-forming Na(v)1.1 alpha-subunit in neuroblastoma cells. Similarly, endogenous beta2 processing and Na(v)1.1 protein levels are elevated in brains of BACE1-transgenic mice and Alzheimer's disease patients with high BACE1 levels. However, Na(v)1.1 is retained inside the cells and cell surface expression of the Na(v)1 alpha-subunits and sodium current densities are markedly reduced in both neuroblastoma cells and adult hippocampal neurons from BACE1-transgenic mice. BACE1, by cleaving beta2, thus regulates Na(v)1 alpha-subunit levels and controls cell-surface sodium current densities. BACE1 inhibitors may normalize membrane excitability in Alzheimer's disease patients with elevated BACE1 activity.