Activated microglia release a number of substances that can influence neuronal signalling and survival. Here we report that microglia stimulated with the peptide chromogranin A (CGA), secreted the cysteine protease, cathepsin B. Conditioned medium from CGA exposed microglia was neurotoxic to the HT22 hippocampal cell line and to primary cultures of cerebellar granule neurones. In both neuronal cell types, the neurotoxicity could be significantly attenuated with z-FA-fmk or by depletion of microglial conditioned medium with cathepsin B antibody. Conditioned medium from activated microglia or cathepsin B alone induced neuronal apoptosis and caspase 3 activation. Our data indicate that CGA-activated microglia can trigger neuronal apoptosis and that this may be mediated through the secretion of cathepsin B. Since cathepsins may also play a role in the amyloidogenic processing of amyloid precursor protein, these results may have significance for tissue damage and neuronal loss in the neuropathology of Alzheimer's disease.