Amyloid deposition in senile plaques and the cerebral vasculature is a marker of Alzheimer's disease. Whether amyloid itself contributes to the neurodegenerative process or is simply a by-product of that process is unknown. Pheochromocytoma (PC12) and fibroblast (NIH 3T3) cell lines were transfected with portions of the gene for the human amyloid precursor protein. Stable PC12 cell transfectants expressing a specific amyloid-containing fragment of the precursor protein gradually degenerated when induced to differentiate into neuronal cells with nerve growth factor. Conditioned medium from these cells was toxic to neurons in primary hippocampal cultures, and the toxic agent could be removed by immunoabsorption with an antibody directed against the amyloid polypeptide. Thus, a peptide derived from the amyloid precursor may be neurotoxic.