Using transgenic mice expressing human cystatin C (encoded by CST3), we show that cystatin C binds soluble amyloid-beta peptide and inhibits cerebral amyloid deposition in amyloid-beta precursor protein (APP) transgenic mice. Cystatin C expression twice that of the endogenous mouse cystatin C was sufficient to substantially diminish amyloid-beta deposition. Thus, cystatin C has a protective role in Alzheimer's disease pathogenesis, and modulation of cystatin C concentrations may have therapeutic implications for the disease.