Accumulation of amyloid-β peptide (Aβ) in the brain underlies the pathogenesis of Alzheimer's disease (AD). Aβ is produced by β- and γ-secretase-mediated sequential proteolysis of amyloid-β precursor protein (APP). Here we identify a secretory protein named interleukin-like epithelial-mesenchymal transition inducer (ILEI, also known as FAM3 superfamily member C) as a negative regulator of Aβ production. ILEI destabilizes the β-secretase-cleaved APP carboxy-terminal fragment, the penultimate precursor of Aβ, by binding to the γ-secretase complex and interfering with its chaperone properties. Notch signalling and γ-secretase activity are not affected by ILEI. We also show neuronal expression of ILEI and its induction by transforming growth factor-β signalling. The level of secreted ILEI is markedly decreased in the brains of AD patients. Transgenic (Tg) overexpression of ILEI significantly reduces the brain Aβ burden and ameliorates the memory deficit in AD model mice. ILEI may be a plausible target for the development of disease-modifying therapies.