Hydrophobic fragments generated from various proteolytically degraded precursor proteins are known to form amyloid fibrils which have biological effects unrelated to precursor function. We examined the effects on HepG2 cells of the fibrillar and soluble C-terminal peptide [AAT-(358-394)] generated during the cleavage of the alpha-1-antitrypsin molecule by target proteinase. Soluble and fibrillar forms of AAT-(358-394)-peptide increased low-density lipoprotein (LDL) binding by 1-fold and 15-fold, respectively, an effect which was diminished by incubation or coincubation of cells with LDL, but was not affected by the serpin-enzyme complex. This effect of AAT-(358-394)-peptide appears to be on LDL receptor binding and not on the serpin-enzyme complex (SEC) or LDL receptor-related protein binding. The terminal deoxynucleotidyl transferase-biotin dUTP nick-end labeling assay for apoptosis showed increased DNA fragmentation in cells incubated with AAT-(358-394)-peptide fibrils relative to controls and LDL-incubated cells. [3H]Thymidine incorporation in cells incubated with fibrils for 4 days decreased by 60%. We conclude that interaction of AAT-(358-394)-peptide fibrils with cell surface receptor(s) disturbs intracellular cholesterol homeostasis and induces cell death.