The aim of the study was to identify and characterize human brain peptidases capable of degrading Alzheimer's beta-amyloid protein. Synthetic beta-amyloid protein (1-40) was rapidly degraded by a human brain soluble fraction, optimum activity occurring at around pH4. Pepstatin totally inhibited the activity showing that an aspartyl protease was responsible. HPLC separation and identification of the degradation products showed that the L34-M35 bond was the primary site of cleavage followed by hydrolysis of the F19-F20 and F20-A21 bonds. The major lysosomal aspartyl protease, cathepsin D, hydrolysed beta-amyloid protein with the same pH profile, inhibitor sensitivity and bond specificity as the activity present in human brain soluble fraction. We suggest that cathepsin D may play an important role in regulating brain concentrations of beta-amyloid protein (1-40).