The Alzheimer's amyloid protein (Abeta) is released from the larger amyloid beta-protein precursor (APP) by unidentified enzymes referred to as beta- and gamma-secretase. beta-Secretase cleaves APP on the amino side of Abeta producing a large secreted derivative (sAPPbeta) and an Abeta-bearing C-terminal derivative that is subsequently cleaved by gamma-secretase to release Abeta. Alternative cleavage of the APP by alpha-secretase at Abeta16/17 releases the secreted derivative sAPPalpha. In yeast, alpha-secretase activity has been attributed to glycosylphosphatidylinositol (GPI)-anchored aspartyl proteases. To examine the role of GPI-anchored proteins, we specifically removed these proteins from the surface of mammalian cells using phosphatidylinositol-specific phospholipase C (PI-PLC). PI-PLC treatment of fetal guinea pig brain cultures substantially reduced the amount of Abeta40 and Abeta42 in the medium but had no effect on sAPPalpha. A mutant CHO cell line (gpi85), which lacks GPI-anchored proteins, secreted lower levels of Abeta40, Abeta42, and sAPPbeta than its parental line (GPI+). When this parental line was treated with PI-PLC, Abeta40, Abeta42, and sAPPbeta decreased to levels similar to those observed in the mutant line, and the mutant line was resistant to these effects of PI-PLC. These findings provide strong evidence that one or more GPI-anchored proteins play an important role in beta-secretase activity and Abeta secretion in mammalian cells. The cell-surface GPI-anchored protein(s) involved in Abeta biogenesis may be excellent therapeutic target(s) in Alzheimer's disease.