Pathogenesis of Alzheimer's disease (AD) is associated with aggregation of the amyloid-β (Aβ) peptide into oligomeric and fibrillar assemblies; however, little is known about the molecular basis of aggregation of Aβ into distinct assembly states. Here we demonstrate that phosphorylation at serine 26 (S26) impairs Aβ fibrillization while stabilizing its monomers and nontoxic soluble assemblies of nonfibrillar morphology. NMR spectroscopy and replica-exchange molecular dynamics indicate that introduction of a phosphate group or phosphomimetic at position 26 diminishes Aβ's propensity to form a β-hairpin, rigidifies the region around the modification site, and interferes with formation of a fibril-specific salt bridge between aspartic acid 23 and lysine 28. The combined data demonstrate that phosphorylation of S26 prevents a distinct conformational rearrangement that is required for progression of Aβ aggregation toward fibrils and provide a basis for a possible role of phosphorylation at serine 26 in AD.