Alzheimer's disease (AD) is the most common form of dementia and is associated with the deposition of the 39- to 43-amino acid beta-amyloid peptide (Abeta) in the brain. C-terminal fragments (CTFs) of amyloid precursor protein (APP) can accumulate in endosomally derived multivesicular bodies (MVBs). These intracellular structures contain intraluminal vesicles that are released from the cell as exosomes when the MVB fuses with the plasma membrane. Here we have investigated the role of exosomes in the processing of APP and show that these vesicles contain APP-CTFs, as well as Abeta. In addition, inhibition of gamma-secretase results in a significant increase in the amount of alpha- and beta-secretase cleavage, further increasing the amount of APP-CTFs contained within these exosomes. We identify several key members of the secretase family of proteases (BACE, PS1, PS2, and ADAM10) to be localized in exosomes, suggesting they may be a previously unidentified site of APP cleavage. These results provide further evidence for a novel pathway in which APP fragments are released from cells and have implications for the analysis of APP processing and diagnostics for Alzheimer's disease.