The amyloid hypothesis states that a variety of neurotoxic beta-amyloid (Abeta) species contribute to the pathogenesis of Alzheimer's disease. Accordingly, a key determinant of disease onset and progression is the appropriate balance between Abeta production and clearance. Enzymes responsible for the degradation of Abeta are not well understood, and, thus far, it has not been possible to enhance Abeta catabolism by pharmacological manipulation. We provide evidence that Abeta catabolism is increased after inhibition of plasminogen activator inhibitor-1 (PAI-1) and may constitute a viable therapeutic approach for lowering brain Abeta levels. PAI-1 inhibits the activity of tissue plasminogen activator (tPA), an enzyme that cleaves plasminogen to generate plasmin, a protease that degrades Abeta oligomers and monomers. Because tPA, plasminogen and PAI-1 are expressed in the brain, we tested the hypothesis that inhibitors of PAI-1 will enhance the proteolytic clearance of brain Abeta. Our data demonstrate that PAI-1 inhibitors augment the activity of tPA and plasmin in hippocampus, significantly lower plasma and brain Abeta levels, restore long-term potentiation deficits in hippocampal slices from transgenic Abeta-producing mice, and reverse cognitive deficits in these mice.