Although amyloid beta (Abeta) deposition has been a hallmark of Alzheimer's disease (AD), the absence of a phenotype in the beta amyloid precursor protein (APP) knockout mouse, tends to detract our attention away from the physiological functions of APP. Although much attention has been focused on the neurotoxicity of Abeta, many studies suggest the involvement of APP in neuroplasticity. We found that secreted amyloid precursor protein (sAPP) increased the differentiation of human neural stem cells (hNSCs) in vitro, while an antibody-recognizing APP dose-dependently inhibited these activities. With a high dose of sAPP treatment or wild-type APP gene transfection, hNSCs were differentiated into astrocytes rather than neurons. In vivo, hNSCs transplanted into APP-transgenic mouse brain exhibited glial differentiation rather than neural differentiation. Our results suggest that APP regulates neural stem cell biology in the adult brain, and that altered APP metabolism in Down syndrome or AD may have implications for the pathophysiology of these diseases.