Recent findings link altered processing of beta-amyloid precursor protein (beta APP) to disruption of neuronal Ca2+ homeostasis and an excitotoxic mechanism of cell death in Alzheimer's disease. A major pathway of beta APP metabolism results in the release of secreted forms of beta APP, APPss. These secreted forms are released in response to electrical activity and can modulate neuronal responses to glutamate, suggesting roles in developmental and synaptic plasticity. beta APP is upregulated in response to neural injury and APPss can protect neurons against excitotoxic or ischemic insults by stabilizing the intracellular Ca2+ concentration [Ca2+]i. An alternative beta APP processing pathway liberates intact beta-amyloid peptide, which can form aggregates that disrupt Ca2+ homeostasis and render neurons vulnerable to metabolic or excitotoxic insults. Genetic abnormalities (e.g. certain beta APP mutations or Down syndrome) and age-related changes in brain metabolism (e.g. reduced energy availability or increased oxidative stress) may favor accumulation of [Ca2+]i-destabilizing beta-amyloid peptide and diminish the release of [Ca2+]i-stabilizing, neuroprotective APPss.