Amyloid beta protein (A beta P) is the 40-42 residue polypeptide implicated in the pathogenesis of Alzheimer's disease (AD). We have reconstituted this peptide into phosphatidylserine liposomes and then fused the liposomes with a planar lipid bilayer. When incorporated into this bilayer, the A beta P forms cation selective channels capable of transporting calcium and some monovalent cations including cesium, lithium, potassium, and sodium. The channels behave in an ohmic fashion and single channels can be shown to exhibit multiple subconductance states. Hitherto, A beta P has been presumed to be neurotoxic, although direct demonstration of toxicity has proved elusive. On the basis of the present data we suggest that the ion channel activity of the polypeptide may be the basis of its neurotoxic effects.