The most popular current hypothesis is that Alzheimer's disease (AD) is caused by aggregates of the amyloid peptide (Abeta), which is generated by cleavage of the Abeta protein precursor (APP) by beta-secretase (BACE-1) followed by gamma-secretase. BACE-1 cleavage is limiting for the production of Abeta, making it a particularly good drug target for the generation of inhibitors that lower Abeta. A landmark discovery in AD was the identification of BACE-1 (a.k.a. Memapsin-2) as a novel class of type I transmembrane aspartic protease. Although BACE-2, a homologue of BACE-1, was quickly identified, follow up studies using knockout mice demonstrated that BACE-1 was necessary and sufficient for most neuronal Abeta generation. Despite the importance of BACE-1 as a drug target, development has been slow due to the incomplete understanding of its function and regulation and the difficulties in developing a brain penetrant drug that can specifically block its large catalytic pocket. This review summarizes the biological properties of BACE-1 and attempts to use phylogenetic perspectives to understand its function. The article also addresses the challenges in discovering a selective drug-like molecule targeting novel mechanisms of BACE-1 regulation.