The amyloid-beta (Abeta) peptide is neurotoxic and associated with the pathology of Alzheimer's disease (AD). We investigated the effect of Abeta peptides on insulin binding to the insulin receptor because it is known that (1) Abeta and insulin are both amyloidogenic peptides sharing a common sequence recognition motif, (2) Abeta and insulin are substrates for the same insulin degrading enzyme, and (3) impaired glucose metabolism is a characteristic event in the pathology of AD. We discovered that Abeta(1-40) and Abeta(1-42,) the main physiological forms, reduced insulin binding and receptor autophosphorylation. The reduction in binding was caused by a decrease in the affinity of insulin binding to the insulin receptor. This reduction was independent of the receptor concentration. The reverse, control peptide Abeta(40-1) did not reduce insulin binding or insulin receptor autophosphorylation. These results demonstrate that Abeta is a direct competitive inhibitor of insulin binding and action. We speculate that the increased levels of Abeta in Alzheimer's disease may be linked to the associated insulin resistance that has been observed previously in this disease.