The amyloid beta-peptide (Abeta) is a 4-kDa species derived from the amyloid precursor protein, which accumulates in the brains of patients with Alzheimer's disease. Although we lack full understanding of the etiology and pathogenesis of selective neuron death, considerable data do imply roles for both the toxic Abeta and increased oxidative stress. Another significant observation is the accumulation of abnormal, ubiquitin-conjugated proteins in affected neurons, suggesting dysfunction of the proteasome proteolytic system in these cells. Recent reports have indicated that Abeta can bind and inhibit the proteasome, the major cytoslic protease for degrading damaged and ubiquitin-conjugated proteins. Earlier results from our laboratory showed that moderately oxidized proteins are preferentially recognized and degraded by the proteasome; however, severely oxidized proteins cannot be easily degraded and, instead, inhibit the proteasome. We hypothesized that oxidatively modified Abeta might have a stronger (or weaker) inhibitory effect on the proteasome than does native Abeta. We therefore also investigated the proteasome inhibitory action of Abeta1-40 (a peptide comprising the first 40 residues of Abeta) modified by the intracellular oxidant hydrogen peroxide, and by the lipid peroxidation product 4-hydroxynonenal (HNE). H2O2 modification of Abeta1-40 generates a progressively poorer inhibitor of the purified human 20S proteasome. In contrast, HNE modification of Abeta1-40 generates a progressively more selective and efficient inhibitor of the degradation of fluorogenic peptides and oxidized protein substrates by human 20S proteasome. This interaction may contribute to certain pathological manifestations of Alzheimer's disease.