One of the hallmarks of Alzheimer's disease (AD) is the deposition of beta-amyloid (Abeta) peptides in neuritic plaques. Abeta peptides are derived from sequential cleavage of amyloid precursor protein (APP) by beta- and gamma-secretases. beta-APP cleaving enzyme-1 (BACE1) has been shown to be the major beta-secretase and is a primary therapeutic target for AD. We report here novel BACE1 inhibitory peptidomimetics, which are derived from catalytic domains of BACE1 themselves, instead of APP cleavage sites and are structurally modified by myristoylation in N-terminus for efficient cell permeability. The peptides not only inhibited the formation of APPbeta (a soluble N-terminal fragment of APP cleaved by beta-secretase), but also significantly reduced Abeta40 production. Our results suggest a new approach for identifying inhibitory agents for the treatment of AD.