Postmenopausal estrogen depletion is a characterized risk factor for Alzheimer disease (AD), a human disorder linked to high levels of beta-amyloid peptide (Abeta) in brain tissue. Previous studies suggest that estrogen negatively regulates the level of Abeta in the brain, but the molecular mechanism is unknown. Here, we provide evidence that estrogen promotes Abeta degradation mainly through a principal Abeta degrading enzyme, neprilysin, in neuroblastoma SH-SY5Y cells. We also demonstrate that up-regulation of neprilysin by estrogen is dependent on both estrogen receptor alpha and beta (ERalpha and ERbeta), and ligand-activated ER regulates expression of neprilysin through physical interactions between ER and estrogen response elements (EREs) identified in the neprilysin gene. These results were confirmed by in vitro gel shift and in vivo chromatin immunoprecipitation analyses, which demonstrate specific binding of ERalpha and ERbeta to two putative EREs in the neprilysin gene. The EREs also enhance ERalpha- and ERbeta-dependent reporter gene expression in a yeast model system. Therefore, the study described here provides a putative mechanism by which estrogen positively regulates expression of neprilysin to promote degradation of Abeta, reducing risk for AD. These results may lead to novel approaches to prevent or treat AD.