b-secretase, also called BACE (b-site of APP cleaving enzyme), is an aspartic-acid protease important in the pathogenesis of Alzheimer's disease and in the formation of myelin sheaths in peripheral nerve cells. BACE1, also known as memapsin-2, is the major b-secretase for generation of the 40 or 42 amino-acid-long b-amyloid peptides that aggregate in the brains of Alzheimer's patients. Extracellular cleavage of APP by BACE1 releases a soluble extracellular fragment and is followed by APP cleavage within its transmembrane domain by g-secretase. The second cleavage releases the intracellular domain of APP and b-amyloid. The immature form of BACE1 contains an N-terminal signal sequence (residues 1