The deposition of the beta amyloid peptide in neuritic plaques and cerebral blood vessels is a hallmark of Alzheimer's disease (AD) pathology. The major component of the amyloid deposit is a 4.2-kDa polypeptide termed amyloid beta-protein of 39-43 residues, which is derived from processing of a larger amyloid precursor protein (APP). It is hypothesized that a chymotrypsin-like enzyme is involved in the processing of APP. We have discovered a new serine protease from the AD brain by polymerase chain reaction amplification of DNA sequences representing active site homologous regions of chymotrypsin-like enzymes. A cDNA clone was identified as one out of one million that encodes Zyme, a serine protease. Messenger RNA encoding Zyme can be detected in some mammalian species but not in mice, rats, or hamster. Zyme is expressed predominantly in brain, kidney, and salivary gland. Zyme mRNA cannot be detected in fetal brain but is seen in adult brain. The Zyme gene maps to chromosome 19q13.3, a region which shows genetic linkage with late onset familial Alzheimer's disease. When Zyme cDNA is co-expressed with the APP cDNA in 293 (human embryonic kidney) cells, amyloidogenic fragments are detected using C-terminal antibody to APP. These co-transfected cells release an abundance of truncated amyloid beta-protein peptide and shows a reduction of residues 17-42 of Abeta (P3) peptide. Zyme is immunolocalized to perivascular cells in monkey cortex and the AD brain. In addition, Zyme is localized to microglial cells in our AD brain sample. The amyloidogenic potential and localization in brain may indicate a role for this protease in amyloid precursor processing and AD.