Extracellular deposits of beta-amyloid (Abeta) peptide closely match areas of neuronal loss in, and are a postmortem diagnostic indicator of, Alzheimer's disease. Neuronal cultures treated with fibrillar Abeta can be protected from neurotoxicity by caspase-8 inhibition or the expression of dominant-negative FADD, both of which are components of the Fas death receptor pathway, and neurons with defective Fas and FasL are resistant to Abeta neurotoxicity. The receptor binding region of FasL can be shed from cells by metalloproteinases, and this process greatly reduces its proapoptotic activity. Here, we show that factors affecting the shedding of membrane-bound FasL significantly impact Abeta neurotoxicity. A broad-spectrum metalloproteinase inhibitor, GM6001/Ilomastat, acted synergistically with Abeta to enhance neurotoxicity through a FasL-dependent mechanism. The disruption of ADAM-based metalloproteinase activity was likely responsible, as MMP-inhibiting TIMPs had no such effect. In contrast, enhanced FasL shedding, by recombinant MMP-7, completely protected neurons from Abeta neurotoxicity. These findings suggest that factors that affect metalloproteinase-mediated shedding of FasL may play a role in the etiology of Alzheimer's disease and may provide an avenue for therapeutic intervention.