beta-Amyloid peptide (Abeta) is generated through the proteolytic cleavage of beta-amyloid precursor protein (APP) by beta- and gamma-secretases. The beta-secretase, BACE1, initiates Abeta formation followed by gamma-cleavage within the APP transmembrane domain. Although BACE1 localizes in the transGolgi network (TGN), its physiological substrates and modulators are not known, In addition, the relationship to other secretase(s) also remains unidentified. Here, we demonstrate that BACE1 binds to nicastrin, a component of gamma-secretase complexes, in vitro, and that nicastrin activates beta-secretase activity in COS-7 cells. (C) 2002 Elsevier Science (USA). All rights reserved.