Alternative splicing of the Alzheimer's amyloid beta protein precursor (ABPP) message leads to the production of several variants of this precursor polypeptide. Two of these variants contain a domain that is highly homologous to members of the Kunitz class of protease inhibitors. In order to initiate a study of the physiological role of this domain, we have produced active ABPP Kunitz inhibitor by constructing and expressing a synthetic gene in E. coli. Nerve growth factor (NGF) deficiency has been suggested as a possible cause of the neural degeneration characteristic of Alzheimer's disease, and trypsin and gamma-NGF are the two enzymes that have been shown to be capable of processing beta-NGF precursor to active, mature beta-NGF in vitro, therefore, the specificity of purified recombinant ABPP Kunitz inhibitor was analyzed with respect to these two proteases. Binding of isolated ABPP Kunitz domain both to trypsin (Ki,app less than 10 nM and to gamma-NGF (Ki,app = 300 nM) was observed. This difference in binding to the two proteases correlates with the approximately 20-fold higher rate observed for in vitro processing of the beta-NGF precursor by trypsin compared to processing by gamma-NGF, indicating that perhaps the inhibitor mimics the interaction of the beta-NGF precursor with proteases. The kallikrein actually responsible for beta-NGF precursor processing in vivo is unknown, but these results suggest that it is capable of being significantly inhibited by exposure to the ABPP Kunitz domain.