Considerable evidence indicates that the amyloid-beta (Abeta) peptide, a proteolytic fragment of the amyloid precursor protein, is the pathogenic agent in Alzheimer's disease (AD). A number of proteases have been reported as capable of degrading Abeta, among them: neprilysin, insulin-degrading enzyme, endothelin-converting enzyme-1 and -2, angiotensin-converting enzyme and plasmin. These proteases, originating from a variety of cell types, degrade Abeta of various conformational states and in different cellular locations. We report here the isolation of a serine protease from serum-free conditioned medium of human neuroblastoma cells. Tandem mass spectrometry (MS/MS)-based sequencing of the isolated protein identified acyl peptide hydrolase (APH; EC3.4.19.1) as the active peptidase. APH is one of four members of the prolyl oligopeptidase family of serine proteases expressed in a variety of cells and tissues, including erythrocytes, liver and brain, but its precise biological activity is unknown. Here, we describe the identification of APH as an Abeta-degrading enzyme, and we show that the degradation of Abeta by APH isolated from transfected cells is inhibited by APH-specific inhibitors, as well as by synthetic Abeta peptide. In addition, we cloned APH from human brain and from neuroblastoma cells. Most importantly, our results indicate that APH expression in AD brain is lower than in age-matched controls.