Almost all Down syndrome (DS) patients develop characteristic Alzheimer's disease (AD) neuropathology, including neuritic plaques and neurofibrillary tangles, after middle age. The mechanism underlying AD neuropathology in DS has been unknown. Abeta is the central component of neuritic plaques and is generated from APP by cleavage by the beta- and gamma-secretases. Here we show that beta-secretase activity is markedly elevated in DS. The ratio of mature to immature forms of BACE1 is altered in DS. DS has significantly higher levels of mature BACE1 proteins in Golgi than normal controls. Time-lapse live image analysis showed that BACE1 proteins were predominantly immobile in Golgi in DS cells, while they underwent normal trafficking in controls. Thus, overproduction of Abeta in DS is caused by abnormal BACE1 protein trafficking and maturation. Our results provide a novel molecular mechanism by which AD develops in DS and support the therapeutic potential of inhibiting BACE1 in AD and DS.