Chronic stress and elevated glucocorticoids (GCs), the major stress hormones, are risk factors for Alzheimer’s disease (AD) and promote AD pathomechanisms, including overproduction of toxic amyloid-β (Aβ) peptides and intraneuronal accumulation of hyperphosphorylated Tau protein. The latter is linked to downregulation of the small GTPase Rab35, which mediates Tau degradation via the endolysosomal pathway. Whether Rab35 is also involved in Aβ overproduction remains an open question. Here, we find that hippocampal Rab35 levels are decreased not only by stress/GC but also by aging, another AD risk factor. Moreover, we show that Rab35 negatively regulates Aβ production by sorting amyloid precursor protein (APP) and β-secretase (BACE1) out of the endosomal network, where they interact to produce Aβ. Interestingly, Rab35 coordinates distinct intracellular trafficking steps for BACE1 and APP, mediated by its effectors OCRL and ACAP2, respectively. Finally, we demonstrate that Rab35 overexpression prevents the amyloidogenic trafficking of APP and BACE1 induced by high GC levels. These studies identify Rab35 as a key regulator of APP processing and suggest that its downregulation may contribute to stress-related and AD-related amyloidogenesis.