The mechanisms that contribute to neuronal degeneration in Alzheimer's disease (AD) are not understood. Abnormal accumulations of beta-amyloid peptide (beta AP) are thought to be involved in the neurodegenerative process, and recent studies have demonstrated neurotoxic actions of beta APs. We now report that the mechanism of beta AP-mediated neurotoxicity in hippocampal cell culture involves a destabilization of neuronal calcium homeostasis resulting in elevations in intracellular calcium levels ([Ca2+]i) that occur during exposure periods of 6 hr to several days. Both the elevations of [Ca2+]i and neurotoxicity were directly correlated with aggregation of the peptide as assessed by beta AP immunoreactivity and confocal laser scanning microscopy. Exposure of neurons to beta AP resulted in increased sensitivity to the [Ca2+]i-elevating and neurodegenerative effects of excitatory amino acids. Moreover, [Ca2+]i responses to membrane depolarization and calcium ionophore were greatly enhanced in beta AP-treated neurons. Neurons in low cell density cultures were more vulnerable to beta AP toxicity than were neurons in high cell density cultures. Basic fibroblast growth factor (bFGF), but not nerve growth factor (NGF), significantly reduced both the loss of calcium homeostasis and the neuronal damage otherwise caused by beta AP. In AD, beta AP may endanger neurons by destabilizing calcium homeostasis and bFGF may protect neurons by stabilizing intracellular calcium levels. Aggregation of beta AP seems to be a major determinant of its [Ca2+]i-destabilizing and neurotoxic potency.