Pathogenesis of Alzheimer's disease (AD) is associated with aggregation of the amyloid-beta (A beta) peptide into oligomeric and fibrillar assemblies; however, little is known about the molecular basis of aggregation of A beta into distinct assembly states. Here we demonstrate that phosphorylation at serine 26 (S26) impairs A beta fibrillization while stabilizing its monomers and nontoxic soluble assemblies of nonfibrillar morphology. NMR spectroscopy and replica-exchange molecular dynamics indicate that introduction of a phosphate group or phosphomimetic at position 26 diminishes A beta's propensity to form a beta-hairpin, rigidifies the region around the modification site, and interferes with formation of a fibril-specific salt bridge between aspartic acid 23 and lysine 28. The combined data demonstrate that phosphorylation of S26 prevents a distinct conformational rearrangement that is required for progression of A beta aggregation toward fibrils and provide a basis for a possible role of phosphorylation at serine 26 in AD.