Abnormal accumulation of beta-amyloid (Abeta) in Alzheimer's disease (AD) is associated with prominent brain inflammation. Whereas earlier studies concluded that this inflammation is detrimental, more recent animal data suggest that at least some inflammatory processes may be beneficial and promote Abeta clearance. Consistent with these observations, overproduction of transforming growth factor (TGF)-beta1 resulted in a vigorous microglial activation that was accompanied by at least a 50% reduction in Abeta accumulation in human amyloid precursor protein (hAPP) transgenic mice. In a search for inflammatory mediators associated with this reduced pathology, we found that brain levels of C3, the central component of complement and a key inflammatory protein activated in AD, were markedly higher in hAPP/TGF-beta1 mice than in hAPP mice. To assess the importance of complement in the pathogenesis of AD-like disease in mice, we inhibited C3 activation by expressing soluble complement receptor-related protein y (sCrry), a complement inhibitor, in the brains of hAPP mice. Abeta deposition was 2- to 3-fold higher in 1-year-old hAPP/sCrry mice than in age-matched hAPP mice and was accompanied by a prominent accumulation of degenerating neurons. These results indicate that complement activation products can protect against Abeta-induced neurotoxicity and may reduce the accumulation or promote the clearance of amyloid and degenerating neurons. These findings provide evidence for a role of complement and innate immune responses in AD-like disease in mice and support the concept that certain inflammatory defense mechanisms in the brain may be beneficial in neurodegenerative disease.