The amyloid precursor protein (APP) is proteolytically processed predominantly by alpha-secretase to release the ectodomain (sAPPalpha). In this study, we have addressed the cellular location of the constitutive alpha-secretase cleavage of endogenous APP in a neuronal cell line. Incubation of the neuroblastoma cell line IMR32 at 20 degrees C prevented the secretion into the medium of soluble wild-type APP cleaved by alpha-secretase as revealed by both immunoelectrophoretic blot analysis with a site-specific antibody and immunoprecipitation following metabolic labeling of the cells. No sAPPalpha was detected in the cell lysates following incubation of the cells at 20 degrees C, indicating that alpha-secretase does not cleave APP in the secretory pathway prior to or within the trans-Golgi network. Parallel studies using an antibody that recognizes specifically the neoepitope revealed on soluble APP cleaved by beta-secretase indicated that this enzyme was acting intracellularly. alpha-Secretase is a zinc metalloproteinase susceptible to inhibition by hydroxamate-based compounds such as batimastat [Parvathy, S., et al. (1998) Biochemistry 37, 1680-1685]. Incubation of the cells with a cell-impermeant, biotinylated hydroxamate inhibitor inhibited the release of sAPPalpha by >92%, indicating that alpha-secretase is cleaving APP almost exclusively at the cell surface. The observation that alpha-secretase cleaves APP at the cell surface, while beta-secretase can act earlier in the secretory pathway within the neuronal cell line indicates that there must be strict control mechanisms in place to ensure that APP is normally cleaved primarily by alpha-secretase in the nonamyloidogenic pathway to produce the neuroprotective sAPPalpha.