The cellular mechanisms underlying the generation of beta A4 in Alzheimer's disease and its relationship to the normal metabolism of the amyloid protein precursor (APP) are unknown. In this report, we show that expression of the C-terminal 100 residues of APP, with (SPA4CT) or without (A4CT) a signal sequence in the N-terminal position, in human neuroblastoma cells results in secretion of a 4 kDa beta A4-like peptide. In A4CT and SPA4CT expressing SY5Y cells, beta A4 generation could not be inhibited by the lysosomotropic amines chloroquine and ammonium chloride but was inhibited by brefeldin A, monensin and methylamine. The last also selectively inhibits APP secretion in neuroblastoma cells [1]. The finding that chloroquine and ammonium chloride inhibit beta A4 generation from full length APP but not from A4CT and SPA4CT are consistent with the assumption that the two cleavages necessary to generate beta A4 operate in two different compartments. Our data suggest the cleavage which generates the C-terminus of beta A4 takes place in the same compartment (late Golgi or endosomal vesicles) in which the APP-secretase operates.