Cultured microglia internalize fibrillar amyloid Abeta (fAbeta) and deliver it to lysosomes. Degradation of fAbeta by microglia is incomplete, but macrophages degrade fAbeta efficiently. When mannose-6 phosphorylated lysosomal enzymes were added to the culture medium of microglia, degradation of fAbeta was increased, and the increased degradation was inhibited by excess mannose-6-phosphate, which competes for binding and endocytic uptake. This suggests that low activity of one or more lysosomal enzymes in the microglia was responsible for the poor degradation of fAbeta. To further characterize the degradation of fAbeta in late endosomes and lysosomes, we analyzed fAbeta-derived intracellular degradation products in macrophages and microglia by mass spectrometry. Fragments with truncations in the first 12 N-terminal residues were observed in extracts from both cell types. We also analyzed material released by the cells. Microglia released mainly intact Abeta1-42, whereas macrophages released a variety of N-terminal truncated fragments. These results indicate that initial proteolysis near the N-terminus is similar in both cell types, but microglia are limited in their ability to make further cuts in the fAbeta.