Beta-amyloid (Abeta) is a major pathological determinant of Alzheimer's disease (AD). Both active and passive immunization studies have shown that antibodies against Abeta are effective in decreasing cerebral Abeta levels, reducing Abeta accumulation, and attenuating cognitive deficits in animal models of AD. However, the therapeutic potential of these antibodies in human AD patients is limited because of adverse inflammatory reactions and cerebral hemorrhaging associated with the treatments. Here we show that single chain variable fragments (scFv's) represent an attractive alternative to more conventional antibody-based therapeutics to reduce Abeta toxicity. The binding affinities and binding epitopes of two different scFv's to Abeta were characterized using a surface plasmon resonance (SPR) biosensor. An scFv binding the 17-28 region of Abeta effectively inhibited in vitro aggregation of Abeta as determined by thioflavin T (ThT) fluorescence staining and atomic force microscopy (AFM) analysis, while an scFv binding the carboxyl-terminal region of Abeta (residues 29-40) did not inhibit aggregation. The scFv to the 17-28 region when co-incubated with Abeta not only decreased aggregation but also eliminated any toxic effects of aggregated Abeta on the human neuroblastoma cell line, SH-SY5Y. The ability of scFv's to inhibit both aggregation and cytotoxicity of Abeta indicates that scFv's have potential therapeutic value for treating AD.