The prevalence of dementia in the Western world in people over the age of 60 has been estimated to be greater than 5%, about two-thirds of which are due to Alzheimer's disease. The age-specific prevalence of Alzheimer's disease nearly doubles every 5 years after age 65, leading to a prevalence of greater than 25% in those over the age of 90 (ref. 3). Here, to search for low-frequency variants in the amyloid-β precursor protein (APP) gene with a significant effect on the risk of Alzheimer's disease, we studied coding variants in APP in a set of whole-genome sequence data from 1,795 Icelanders. We found a coding mutation (A673T) in the APP gene that protects against Alzheimer's disease and cognitive decline in the elderly without Alzheimer's disease. This substitution is adjacent to the aspartyl protease β-site in APP, and results in an approximately 40% reduction in the formation of amyloidogenic peptides in vitro. The strong protective effect of the A673T substitution against Alzheimer's disease provides proof of principle for the hypothesis that reducing the β-cleavage of APP may protect against the disease. Furthermore, as the A673T allele also protects against cognitive decline in the elderly without Alzheimer's disease, the two may be mediated through the same or similar mechanisms.