Amyloid beta peptide (Abeta) is a physiological peptide that is constantly catabolized in the brain. We previously demonstrated that an endopeptidase sensitive to phosphoramidon and thiorphan conducts the initial rate-limiting proteolysis of Abeta in vivo, but the exact molecular identity of the peptidase(s) has remained unknown because of the molecular redundancy of such activity. We analyzed the brain-derived enzyme by means of immuno-depletion and gene disruption, and demonstrate here that neprilysin accounts for the majority of the Abeta-degrading activity. Furthermore, kinetic analysis, giving a K(m) value of 2.8 +/- 0.76 microM, indicated that Abeta(1-42) is a relevant substrate for neprilysin.