Alzheimer's disease (AD) is characterized by a microglial-mediated inflammatory response elicited by extensive amyloid deposition in the brain. Nonsteroidal anti-inflammatory drug (NSAID) treatment reduces AD risk, slows disease progression, and reduces microglial activation; however, the basis of these effects is unknown. We report that treatment of 11-month-old Tg2576 mice overexpressing human amyloid precursor protein (APP) with the NSAID ibuprofen for 16 weeks resulted in the dramatic and selective reduction of SDS-soluble beta-amyloid (Abeta)42, whereas it had smaller effects on SDS-soluble Abeta40 levels. Ibuprofen treatment resulted in 60% reduction of amyloid plaque load in the cortex of these animals. In vitro studies using APP-expressing 293 cells showed that ibuprofen directly affected APP processing, specifically reducing the production of Abeta42. Ibuprofen treatment resulted in a significant reduction in microglial activation in the Tg2576 mice, as measured by CD45 and CD11b expression. NSAIDs activate the nuclear hormone receptor peroxisome proliferator-activated receptor gamma (PPARgamma); however, a potent agonist of this receptor, pioglitazone, only modestly reduced SDS-soluble Abeta levels and did not affect amyloid plaque burden or microglia activation, indicating that PPARgamma activation is not involved in the Abeta lowering effect of NSAIDs. These data show that chronic NSAID treatment can reduce brain Abeta levels, amyloid plaque burden, and microglial activation in an animal model of Alzheimer's disease.