Inheritance of apoE4 is a strong risk factor for the development of late-onset sporadic Alzheimer's disease (AD). Several lines of evidence suggest that apoE4 binds to the Alzheimer Abeta protein and, under certain experimental conditions, promotes formation of beta-sheet structures and amyloid fibrils. Deposition of amyloid fibrils is a critical step in the development of AD. We report here that addition of melatonin to Abeta in the presence of apoE resulted in a potent isoform-specific inhibition of fibril formation, the extent of which was far greater than that of the inhibition produced by melatonin alone. This effect was structure-dependent and unrelated to the antioxidant properties of melatonin, since it could be reproduced neither with the structurally related indole N-acetyl-5-hydroxytryptamine nor with the antioxidants ascorbate, alpha-tocophenol, and PBN. The enhanced inhibitory effects of melatonin and apoE were lost when bovine serum albumin was substituted for apoE. In addition, Abeta in combination with apoE was highly neurotoxic (apoE4 > apoE3) to neuronal cells in culture, and this activity was also prevented by melatonin. These findings suggest that reductions in brain melatonin, which occur during aging, may contribute to a proamyloidogenic microenvironment in the aging brain.