We have previously shown that apolipoprotein E (Apoe) promotes the formation of amyloid in brain and that astrocyte-specific expression of APOE markedly affects the deposition of amyloid-beta peptides (Abeta) in a mouse model of Alzheimer disease. Given the capacity of astrocytes to degrade Abeta, we investigated the potential role of Apoe in this astrocyte-mediated degradation. In contrast to cultured adult wild-type mouse astrocytes, adult Apoe(-/-) astrocytes do not degrade Abeta present in Abeta plaque-bearing brain sections in vitro. Coincubation with antibodies to either Apoe or Abeta, or with RAP, an antagonist of the low-density lipoprotein receptor family, effectively blocks Abeta degradation by astrocytes. Phase-contrast and confocal microscopy show that Apoe(-/-) astrocytes do not respond to or internalize Abeta deposits to the same extent as do wild-type astrocytes. Thus, Apoe seems to be important in the degradation and clearance of deposited Abeta species by astrocytes, a process that may be impaired in Alzheimer disease.