Alternative processing of the beta-amyloid precursor protein (beta APP) can result in liberation of either secreted forms of beta APP (APPSs), which may play roles in neuronal plasticity and survival, or amyloid beta-peptide (A beta), which can be neurotoxic. In rat hippocampal cell cultures A beta 1-40 caused a time- and concentration-dependent reduction in neuronal survival. APPS695 and APPS751 significantly reduced A beta-induced injury in a concentration-dependent manner. A beta caused an elevation of intracellular calcium levels ([Ca2+]i) which was significantly attenuated by APPSs. A beta also caused induction of reactive oxygen species (measured using the oxidation-sensitive fluorescent dye 2,7-dichlorofluorescein) which was also attenuated by APPSs. A beta-induced neurotoxicity and elevations of [Ca2+]i were attenuated by vitamin E, suggesting the involvement of free radicals in A beta-induced loss of calcium homeostasis and neuronal injury. The APPSs protected neurons against oxidative injury caused by exposure to iron. Taken together, the data indicate that A beta kills neurons by causing free radical production and increased [Ca2+]i. APPSs can protect neurons against such free radical- and Ca(2+)-mediated injury. These findings support the hypothesis that altered processing of beta APP contributes to neuronal injury in Alzheimer's disease.