Swedish double mutation (KM670/671NL) of amyloid precursor protein (APP) is reported to increase toxic amyloid β (Aβ) production via aberrant cleavage at the β-secretase site and thereby cause early-onset Alzheimer's disease (AD). However, the underlying molecular mechanisms leading to AD pathogenesis remains largely unknown. Previously, our transcriptome sequence analyses revealed global expressional modifications of over 600 genes in APP-Swedish mutant-expressing H4 (H4-sw) cells compared to wild type H4 cells. Insulin-like growth factor binding protein 3 (IGFBP3) is one gene that showed significantly decreased mRNA expression in H4-sw cells. In this study, we investigated the functional role of IGFBP3 in AD pathogenesis and elucidated the mechanisms regulating its expression. We observed decreased IGFBP3 expression in the H4-sw cell line as well as the hippocampus of AD model transgenic mice. Treatment with exogenous IGFBP3 protein inhibited Aβ1-42- induced cell death and caspase-3 activity, whereas siRNA-mediated suppression of IGFBP3 expression induced cell death and caspase-3 cleavage. In primary hippocampal neurons, administration of IGFBP3 protein blocked apoptotic cell death due to Aβ1-42 toxicity. These data implicate a protective role for IGFBP3 against Aβ1-42-mediated apoptosis. Next, we investigated the regulatory mechanisms of IGFBP3 expression in AD pathogenesis. We observed abnormal IGFBP3 hypermethylation within the promoter CpG island in H4-sw cells. Treatment with the DNA methyltransferase inhibitor 5-aza-2'-deoxycytidine restored IGFBP3 expression at both the mRNA and protein levels. Chronic exposure to Aβ1-42 induced IGFBP3 hypermethylation at CpGs, particularly at loci -164 and -173, and subsequently suppressed IGFBP3 expression. Therefore, we demonstrate that expression of anti-apoptotic IGFBP3 is regulated by epigenetic DNA methylation, suggesting a mechanism that contributes to AD pathogenesis.