It is well established that the proteolytic processing of the ␤-amyloid precursor protein (APP) generates ␤-amyloid (A␤), which plays a central role in the pathogenesis of Alzheimer's disease (AD). In contrast, the physiological role of APP and of its numerous proteolytic fragments and the question of whether a loss of these functions contributes to AD are still unknown. To address this question, we replaced the endogenous APP locus by gene-targeted alleles and generated two lines of knock-in mice that exclusively express APP deletion variants corresponding either to the secreted APP ectodomain (APPs␣) or to a C-terminal (CT) truncation lacking the YENPTY interaction motif (APP⌬CT15). Interestingly, the ⌬CT15 deletion resulted in reduced turnover of holoAPP, increased cell surface expression, and strongly reduced A␤ levels in brain, likely because of reduced processing in the endocytic pathway. Most importantly, we demonstrate that in both APP knock-in lines the expression of APP N-terminal domains either grossly attenuated or completely rescued the prominent deficits of APP knock-out mice, such as reductions in brain and body weight, grip strength deficits, alterations in circadian locomotor activity, exploratory activity, and the impairment in spatial learning and long-term potentiation. Together, our data suggest that the APP C terminus is dispensable and that APPs␣ is sufficient to mediate the physiological functions of APP assessed by these tests.