Amyloid precursor protein (APP) and amyloid beta-peptide (Abeta) have been implicated in a variety of physiological and pathological processes underlying nervous system functions. APP shares many features with adhesion molecules in that it is involved in neurite outgrowth, neuronal survival and synaptic plasticity. It is, thus, of interest to identify binding partners of APP that influence its functions. Using biochemical cross-linking techniques we have identified ATP synthase subunit alpha as a binding partner of the extracellular domain of APP and Abeta. APP and ATP synthase colocalize at the cell surface of cultured hippocampal neurons and astrocytes. ATP synthase subunit alpha reaches the cell surface via the secretory pathway and is N-glycosylated during this process. Transfection of APP-deficient neuroblastoma cells with APP results in increased surface localization of ATP synthase subunit alpha. The extracellular domain of APP and Abeta partially inhibit the extracellular generation of ATP by the ATP synthase complex. Interestingly, the binding sequence of APP and Abeta is similar in structure to the ATP synthase-binding sequence of the inhibitor of F1 (IF(1)), a naturally occurring inhibitor of the ATP synthase complex in mitochondria. In hippocampal slices, Abeta and IF(1) similarly impair both short- and long-term potentiation via a mechanism that could be suppressed by blockade of GABAergic transmission. These observations indicate that APP and Abeta regulate extracellular ATP levels in the brain, thus suggesting a novel mechanism in Abeta-mediated Alzheimer's disease pathology.