Clonal central nervous system neuronal cells, B103, do not synthesize detectable endogenous APP or APLP. B103 cells transfected with both wild-type (B103/APP) and mutant APP construct (B103/APP delta NL) secreted comparable amounts of soluble forms of APP (sAPP). B103/APP cells produced sAPP and cleaved at amyloid beta/A4 (A beta) 16, the alpha-secretase site, and B103/APP delta NL cells produced sAPP beta cleaved at A beta 1, the beta-secretase site. B103/APP delta NL cells developed fewer neurites than B103/APP cells in a serum-free defined medium. Neurite numbers of parent B103 cells were increased by the 50% conditioned medium (CM) from B103/APP cells but reduced by the CM from B103/APP delta NL cells. Chemically synthesized A beta at concentration levels higher than 1 nM reduced numbers of neurites from B103 or B103/APP delta NL cells. However, A beta at 1-100 nM could not reduce the neurite number of B103/APP cells. The protective activity against A beta's deleterious effect to reduce neurite numbers was attributed to sAPP alpha in the CM. Although sAPP alpha could block the effect of A beta, sAPP beta could not do so under the identical condition, suggesting the importance of the C-terminal 15-amino acid sequence in sAPP alpha. Nevertheless, sAPP alpha's protective activity required the N-terminal sequence around RERMS, previously identified to be the active domain of sAPP beta. The overall effect of APP mutation which overproduced A beta and sAPP beta and underproduced sAPP alpha was a marked decline in the neurotrophic effect of APP. We suggest that the disruption of balance between the detrimental effect of A beta and the trophic effect of sAPP may be important in the pathogenesis of AD caused by this pathogenic APP mutation.