A recent study showed that F-spondin, a protein associated with the extracellular matrix, interacted with amyloid precursor protein (APP) and inhibited beta-secretase cleavage. F-spondin contains a thrombospondin domain that we hypothesized could interact with the family of receptors for apolipoprotein E (apoE). Through coimmunoprecipitation experiments, we demonstrated that F-spondin interacts with an apoE receptor (apoE receptor 2 [ApoEr2]) through the thrombospondin domain of F-spondin and the ligand binding domain of ApoEr2. Full-length F-spondin increased coimmunoprecipitation of ApoEr2 and APP in transfected cells and primary neurons and increased surface expression of APP and ApoEr2. Full-length F-spondin, but none of the individual F-spondin domains, increased cleavage of APP and ApoEr2, resulting in more secreted forms of APP and ApoEr2 and more C-terminal fragments (CTF) of these proteins. In addition, full-length F-spondin, but not the individual domains, decreased production of the beta-CTF of APP and Abeta in transfected cells and primary neurons. The reduction in APP beta-CTF was blocked by receptor-associated protein (RAP), an inhibitor of lipoprotein receptors, implicating ApoEr2 in the altered proteolysis of APP. ApoEr2 coprecipitated with APP alpha- and beta-CTF, and F-spondin reduced the levels of APP intracellular domain signaling, suggesting that there are also intracellular interactions between APP and ApoEr2, perhaps involving adaptor proteins. These studies suggest that the extracellular matrix molecule F-spondin can cluster APP and ApoEr2 together on the cell surface and affect the processing of each, resulting in decreased production of Abeta.