Metabolism of amyloid-beta peptide (Abeta) is closely associated with the pathology and etiology of Alzheimer's disease (AD). Since neprilysin is the only rate-limiting catabolic peptidase proven by reverse genetics to participate in Abeta metabolism in vivo, we performed detailed immunohistochemical analysis of neprilysin in mouse brain using neprilysin-deficient mice as a negative control. The aim was to assess, at both the cellular and subcellular levels, where Abeta undergoes neprilysin-dependent degradation in the brain and how neprilysin localization relates to Abeta pathology in amyloid precursor protein (APP)-transgenic mice. In hippocampus, neprilysin was present in the stratum pyramidale and stratum lacunosum-moleculare of the CA1-3 fields and the molecular layer of the dentate gyrus. Confocal double immunofluorescence analyses revealed the subcellular localization of neprilysin along axons and at synapses. This observation suggests that after synthesis in the soma, neprilysin, a type II membrane-associated protein, is axonally transported to the terminals, where Abeta degradation is likely to take place. Among various cell types, GABAergic and metabotropic glutamate 2/3 receptor-positive neurons but not catecholaminergic or cholinergic neurons, expressed neprilysin in hippocampus and neocortex, implying the presence of a cell type-specific mechanism that regulates neprilysin gene expression. As expected, Abeta deposition correlated inversely with neprilysin expression in TgCRND8 APP-transgenic mice. These observations not only support the notion that neprilysin functions as a major Abeta-degrading enzyme in the brain but also suggest that down-regulation of neprilysin activity, which may be caused by aging, is likely to elevate local concentrations of Abeta at and around neuronal synapses.