Multiple studies suggest that cystatin C (CysC) has a role in Alzheimer's disease (AD) and a decrease in CysC secretion is linked to the disease in patients with a polymorphism in the CysC gene. CysC binds amyloid-beta (Abeta) and inhibits formation of Abeta fibrils and oligomers both in vitro and in mouse models of amyloid deposition. Here we studied the effect of CysC on cultured primary hippocampal neurons and a neuronal cell line exposed to either oligomeric or fibrillar cytotoxic forms of Abeta. The extracellular addition of the secreted human CysC together with preformed either oligomeric or fibrillar Abeta increased cell survival. While CysC inhibits Abeta aggregation, it does not dissolve preformed Abeta fibrils or oligomers. Thus, CysC has multiple protective effects in AD, by preventing the formation of the toxic forms of Abeta and by direct protection of neuronal cells from Abeta toxicity. Therapeutic manipulation of CysC levels, resulting in slightly higher concentrations than physiological could protect neuronal cells from cell death in AD.