In the present study, we characterized the intracellular pathway involved in the macrophage production of tumor necrosis factor-alpha (TNF-alpha) and the molecular mechanisms by which cyclic AMP (cAMP) regulates the neurotoxic inflammatory signaling cascade in response to the 105 amino acid carboxyl-terminal fragment (CT105) of amyloid precursor protein, a candidate of alternative toxic elements in Alzheimer's disease (AD) pathology. CT105 in combination with interferon-gamma (IFN-gamma) elicited a robust and sustained increase of TNF-alpha production due to enhanced TNF-alpha mRNA transcription, mediated via increased nuclear factor-kappaB (NF-kappaB) in human macrophages derived from monocytic THP-1 cells. A mechanistic analysis revealed that the cAMP analog, dibutyryl cyclic AMP (dbcAMP), or the adenyl cyclase activator, forskolin, effectively suppressed the stimulant-induced TNF-alpha production by reducing the nuclear translocation and DNA binding activity of NF-kappaB. The inhibitory mechanisms manifested by dbcAMP included the decreased phosphorylation/degradation of NF-kappaB inhibitor (IkappaB) followed by its increased synthesis/stability. Importantly, this macrophage derived TNF-alpha appears to be a key pathological mediator of the resultant neurotoxicity, which was attenuated by increased cAMP levels during macrophage stimulation with CT105. These findings provide evidence, which supports an important role of CT105 as a potent macrophage stimulator eliciting NF-kappaB-mediated inflammatory signals for excess TNF-alpha production, which in turn ultimately leads to the neurotoxicity. In addition, the detailed inhibitory mechanism of cAMP action implies that an increased cAMP level could be benefit against AD progression.