Fragment-based NMR screening, X-ray crystallography, structure-based design, and focused chemical library design were used to identify novel inhibitors for BACE-1. A rapid optimization of an initial NMR hit was achieved by a combination of NMR and a functional assay, resulting in the identification of an isothiourea hit with a K(d) of 15 microM for BACE-1. NMR data and the crystal structure revealed that this hit makes H-bond interactions with the two catalytic aspartates, occupies the nonprime side region of the active site of BACE-1, and extends toward the S3 subpocket (S3sp). A focused NMR-based search for heterocyclic isothiourea isosteres resulted in several distinct classes of BACE-1 active site directed compounds with improved chemical stability and physicochemical properties. The strategy for optimization of the 2-aminopyridine lead series to potent inhibitors of BACE-1 was demonstrated. The structure-based design of a cyclic acylguanidine lead series and its optimization into nanomolar BACE-1 inhibitors are the subject of the companion paper