Several mutations in the amyloid precursor protein (APP) gene have been found to associate with pathologic deposition of the beta-amyloid peptide (Abeta) in neuritic plaques or in the walls of cerebral vessels. We report a mutation at a novel site in APP in a three-generation Iowa family with autosomal dominant dementia beginning in the sixth or seventh decade of life. The proband and an affected brother had progressive aphasic dementia, leukoencephalopathy, and occipital calcifications. Neuropathological examination of the proband revealed severe cerebral amyloid angiopathy, widespread neurofibrillary tangles, and unusually extensive distribution of Abeta40 in plaques. The affected brothers shared a missense mutation in APP, resulting in substitution of asparagine for aspartic acid at position 694. This site corresponds to residue 23 of Abeta, thus differing from familial Alzheimer's disease mutations, which occur outside the Abeta sequence. Restriction enzyme analysis of DNA from 94 unrelated patients with sporadic cerebral amyloid angiopathy-related hemorrhage found no other instances of this mutation. These results suggest a novel site within Abeta that may promote its deposition and toxicity.