The secreted form of Alzheimer amyloid beta/A4 protein precursor (APP) has been shown to be involved in cell growth regulation (Saitoh, T., Sundsmo, M., Roch, J.-M., Kimura, N., Cole, G., Schubert, D., Oltersdorf, T., and Schenk, D.B. (1989) Cell 58, 615-622). Using a strong prokaryotic expression system, we expressed, in Escherichia coli, peptide fragments covering different regions of the secreted form of APP-695. The longest of these fragments (KB75, 572 amino acids from Val-20 to Ile-591), which contained neither the Kunitz-type protease inhibitor (KPI) domain nor the amyloid beta/A4-protein domain, was purified and shown to be biologically active in terms of growth regulation. Two other APP fragments (KB48, 316 amino acids from Val-20 to Met-335; and RB17, 150 amino acids from Thr-296 to Pro-445), overlapping by only 40 amino acids at a close site C-terminal to the KPI insertion site, were also active. Furthermore, a chemically synthesized 40-residue peptide corresponding to this region of overlap also stimulated the growth of A-1 fibroblasts. These results establish the presence of growth-promoting activity in the secreted form of APP-695 and suggest that the site of this activity of APP-695 lies within a 40-amino acid domain next to the KPI insertion site.