We have investigated the effects of the cell-penetrating cysteine protease inhibitors calpain inhibitor I (N-acetyl-Leu-Leu-norleucinal) and calpain inhibitor II (N-acetyl-Leu-Leu-methioninal) on the secretion of the beta-amyloid peptide (beta A4) using transiently transfected cells expressing beta-amyloid precursor protein (APP) with the NL670/671 double mutation. Calpain inhibitor I markedly reduced the amounts of immunoprecipitable beta A4 and p3 peptide released into the culture medium. Within the cells C-terminal APP fragments accumulated. Since beta A4 secretion by cells expressing the 100 amino acid long APP C-terminus was also reduced by calpain inhibitor I, we conclude that this substance directly or indirectly interferes with the gamma-secretase activity responsible for generating the beta A4 and p3 C-termini.