Recent studies suggest that bone marrow-derived macrophages can effectively reduce beta-amyloid (Abeta) deposition in brain. To further elucidate the mechanisms by which macrophages degrade Abeta, we cultured murine macrophages on top of Abeta plaque-bearing brain sections from transgenic mice expressing PDAPP [human amyloid precursor protein (APP) with the APP(717V>F) mutation driven by the platelet-derived growth factor promoter]. Using this ex vivo assay, we found that macrophages from wild-type mice very efficiently degrade both soluble and insoluble Abeta in a time-dependent manner and markedly eliminate thioflavine-S positive amyloid deposits. Because macrophages express and secrete apolipoprotein E (apoE), we compared the efficiency of Abeta degradation by macrophages prepared from apoE-deficient mice or mice expressing human apoE2, apoE3, or apoE4. Macrophages expressing apoE2 were more efficient at degrading Abeta than apoE3-expressing, apoE4-expressing, or apoE-deficient macrophages. Moreover, macrophage-induced degradation of Abeta was effectively blocked by an anti-apoE antibody and receptor-associated protein, an antagonist of the low-density lipoprotein (LDL) receptor family, suggesting involvement of LDL receptors. Measurement of matrix metalloproteinase-9 (MMP-9) activity in the media from human apoE-expressing macrophages cocultured with Abeta-containing brain sections revealed greater levels of MMP-9 activity in apoE2-expressing than in either apoE3- or apoE4-expressing macrophages. Differences in MMP-9 activity appear to contribute to the isoform-specific differences in Abeta degradation by macrophages. These apoE isoform-dependent effects of macrophages on Abeta degradation suggest a novel "peripheral" mechanism for Abeta clearance from brain that may also, in part, explain the isoform-dependent effects of apoE in determining the genetic risk for Alzheimer's disease.