Deposition of beta-amyloid (Abeta) fibrils is an early event in the neurodegenerative processes associated with Alzheimer's disease. According to the "amyloid cascade" hypothesis, Abeta aggregation, and its subsequent deposition as fibrils, is the underlying cause of disease. Abeta is a proteolytic product of amyloid precursor protein (APP); several mutations in APP have been identified that are associated with early onset of disease. Transgenic mice overexpressing APP with the Swedish mutation develop numerous plaques but, surprisingly, lack the neurofibrillary tangles and neuronal loss characteristic of Alzheimer's disease, in apparent contradiction of the amyloid cascade hypothesis. However, recent studies suggest that coproduction of sAPPalpha, an alternative proteolytic product of APP, increases synthesis of transthyretin that, in turn, interacts directly with Abeta to inhibit its toxicity. Here we report results from biophysical analysis of Abeta aggregation kinetics in the presence of transthryetin. At substoichiometric ratios, transthyretin drastically decreased the rate of aggregation without affecting the fraction of Abeta in the aggregate pool. Detailed analysis of the data using a mathematical model demonstrated that the decrease in aggregation rate was due to both a decrease in the rate of elongation relative to the rate of initiation of filaments and a decrease in lateral association of filaments to fibrils. Tryptophan quenching data indicated that transthyretin binds weakly to Abeta, with an estimated apparent KS of 2300 M-1. Taken together, the data support a hypothesis wherein transthyretin preferentially binds to aggregated rather than monomeric Abeta and arrests further growth of the aggregates.