We have recently reported a critical role for apolipoprotein E (apoE) in the process of amyloid deposition and neuritic plaque formation in APP(V717F) transgenic (Tg) mice, an animal model of Alzheimer's disease (AD). In the present study, we have investigated whether the presence or absence of apoE alters the processing of the amyloid precursor protein (APP) to various fragments, including the beta-amyloid peptides (Abeta). Here we show that, in contrast to APP(V717F) Tg mice expressing apoE, APP(V717F) Tg mice deficient in apoE develop anti-Abeta immunoreactive multifocal aggregates, which contain the beta-cleaved C-terminal fragments (beta-CTFs) of APP. Tg mice deficient in apoE also display altered levels of mature full-length APP, increased amounts of beta-CTFs, as well as elevated levels of Abeta(1-40) and Abeta(1-42) in an age- and region-dependent manner when compared to Tg mice expressing apoE. Taken together, these data support a role for apoE in APP processing in vivo.