The amyloid- precursor protein (APP) is a ubiquitously expressed transmembrane protein whose cleavage product, the amyloid- (A) protein, is deposited in amyloid plaques in neurodegenerative conditions such as Alzheimer disease, Down syndrome, and head injury. We recently reported that this protein, normally associated with neurodegenerative conditions, is expressed by human embryonic stem cells (hESCs). We now report that the differential processing of APP via secretase enzymes regulates the proliferation and differentiation of hESCs. hESCs endogenously produce amyloid-, which when added exogenously in soluble and fibrillar forms but not oligomeric forms markedly increased hESC proliferation. The inhibition of APP cleavage by -secretase inhibitors significantly suppressed hESC proliferation and promoted nestin expression, an early marker of neural precursor cell (NPC) formation. The induction of NPC differentiation via the non-amyloidogenic pathway was confirmed by the addition of secreted APP␣, which suppressed hESC proliferation and promoted the formation of NPCs. Together these data suggest that differential processing of APP is normally required for embryonic neurogenesis.The amyloid- precursor protein (APP) 5 is a ubiquitously expressed transmembrane protein whose cleavage product, the amyloid- (A) protein, is deposited in amyloid plaques in the aged brain, following head injury, and in the neurodegenerative conditions of Alzheimer disease (AD) and Down syndrome (DS). APP has structural similarity to growth factors (1) and modulates several important neurotrophic functions, including neuritogenesis, synaptogenesis, and synaptic plasticity (2). The function of APP during early embryogenesis and neurogenesis has not been well described.APP is processed by at least two pathways, the non-amyloidogenic and amyloidogenic pathways. Non-amyloidogenic processing of APP yields secreted APP␣ (sAPP␣), the secreted extracellular domain of APP that acts as a growth factor for many cell types and promotes neuritogenesis (3). Amyloidogenic processing of APP releases sAPP, the APP intracellular domain, and A proteins. The A protein has both neurotoxic and neurotrophic properties (4) dependent on the differentiation state of the neuron; A is neurotoxic to differentiating neurons via a mechanism involving differentiation-associated increases in the phosphorylation of the microtubule-associated protein tau (5) but neurotrophic to undifferentiated embryonic neurons. Evidence supporting a neurotrophic function for A during development include its neurogenic activity toward rat neural stem cells (4 -6). Consistent with these data, two studies have demonstrated increased hippocampal neurogenesis in young transgenic mice overexpressing human APP Sw,Ind (7,8).Recently we reported that human embryonic stem cells (hESCs) express APP and that both the stemness of the cells and the pregnancy-associated hormone human chorionic gonadotropin alter APP expression (9). These results suggest a functional role fo...