It has been postulated that the development of amyloid plaques in Alzheimer's disease (AD) may result from an imbalance between the generation and clearance of the amyloid- peptide (A). Although familial AD appears to be caused by A overproduction, sporadic AD (the most prevalent form) may result from impairment in clearance. Recent evidence suggests that several proteases may contribute to the degradation of A. Furthermore, astrocytes have recently been implicated as a potential cellular mediator of A degradation. In this study, we examined the possibility that matrix metalloproteinases (MMPs), proteases known to be expressed and secreted by astrocytes, could play a role in extracellular A degradation. We found that astrocytes surrounding amyloid plaques showed enhanced expression of MMP-2 and MMP-9 in aged amyloid precursor protein (APP)/presenilin 1 mice. Moreover, astrocyte-conditioned medium (ACM) degraded A, lowering levels and producing several fragments after incubation with synthetic human A 1-40 and A 1-42 . This activity was attenuated with specific inhibitors of MMP-2 and -9, as well as in ACM derived from mmp-2 or -9 knock-out (KO) mice. In vivo, significant increases in the steady-state levels of A were found in the brains of mmp-2 and -9 KO mice compared with wild-type controls.