The beta-site amyloid precursor protein-cleaving enzyme (BACE) cleaves the amyloid precursor protein to produce the N terminus of the amyloid beta peptide, a major component of the plaques found in the brains of Alzheimer's disease patients. Sequence analysis of BACE indicates that the protein contains the consensus sequences found in most known aspartyl proteases, but otherwise has only modest homology with aspartyl proteases of known three-dimensional structure (i.e., pepsin, renin, or cathepsin D). Because BACE has been shown to be one of the two proteolytic activities responsible for the production of the Abeta peptide, this enzyme is a prime target for the design of therapeutic agents aimed at reducing Abeta for the treatment of Alzheimer's disease. Toward this ultimate goal, we have expressed a recombinant, truncated human BACE in a Drosophila melanogaster S2 cell expression system to generate high levels of secreted BACE protein. The protein was convenient to purify and was enzymatically active and specific for cleaving the beta-secretase site of human APP, as demonstrated with soluble APP as the substrate in novel sandwich enzyme-linked immunosorbent assay and Western blot assays. Further kinetic analysis revealed no catalytic differences between this recombinant, secreted BACE, and brain BACE. Both showed a strong preference for substrates that contained the Swedish mutation, where NL is substituted for KM immediately upstream of the cleavage site, relative to the wild-type sequence, and both showed the same extent of inhibition by a peptide-based inhibitor. The capability to produce large quantities of BACE enzyme will facilitate protein structure determination and inhibitor development efforts that may lead to the evolution of useful Alzheimer's disease treatments.