Beta-amyloid (Abeta) 1-42, implicated in the pathogenesis of Alzheimer's disease, forms an oligomeric complex that binds copper at a CuZn superoxide dismutase-like binding site. Abeta.Cu complexes generate neurotoxic H(2)O(2) from O(2) through Cu(2+) reduction, but the reaction mechanism has been unclear. We now report that Abeta1-42, when binding up to 2 eq of Cu(2+), generates the H(2)O(2) catalytically by recruiting biological reducing agents as substrates under conditions where the Cu(2+) or reducing agents will not form H(2)O(2) themselves. Cholesterol is an important substrate for this activity, as are vitamin C, L-DOPA, and dopamine (V(max) for dopamine = 34.5 nm/min, K(m) = 8.9 microm). The activity was inhibited by anti-Abeta antibodies, Cu(2+) chelators, and Zn(2+). Toxicity of Abeta in neuronal culture was consistent with catalytic H(2)O(2) production. Abeta was not toxic in cell cultures in the absence of Cu(2+), and dopamine (5 microm) markedly exaggerated the neurotoxicity of 200 nm Abeta1-42.Cu. Therefore, microregional catalytic H(2)O(2) production, combined with the exhaustion of reducing agents, may mediate the neurotoxicity of Abeta in Alzheimer's disease, and inhibitors of this novel activity may be of therapeutic value.