Deposition of islet amyloid polypeptide (IAPP) as islet amyloid in type 2 diabetes contributes to loss of beta-cell function and mass, yet the mechanism for its occurrence is unclear. Neprilysin is a metallopeptidase known to degrade amyloid in Alzheimer disease. We previously demonstrated neprilysin to be present in pancreatic islets and now sought to determine whether it plays a role in degrading islet amyloid. We used an in vitro model where cultured human IAPP (hIAPP) transgenic mouse islets develop amyloid and thereby have increased beta-cell apoptosis. Islet neprilysin activity was inhibited or up-regulated using a specific inhibitor or adenovirus encoding neprilysin, respectively. Following neprilysin inhibition, islet amyloid deposition and beta-cell apoptosis increased by 54 and 75%, respectively, whereas when neprilysin was up-regulated islet amyloid deposition and beta-cell apoptosis both decreased by 79%. To determine if neprilysin modulated amyloid deposition by cleaving hIAPP, analysis of hIAPP incubated with neprilysin was performed by mass spectrometry, which failed to demonstrate neprilysin-induced cleavage. Rather, neprilysin may act by reducing hIAPP fibrillogenesis, which we showed to be the case by fluorescence-based thioflavin T binding studies and electron microscopy. In summary, neprilysin decreases islet amyloid deposition by inhibiting hIAPP fibril formation, rather than degrading hIAPP. These findings suggest that targeting the role of neprilysin in IAPP fibril assembly, in addition to IAPP cleavage by other peptidases, may provide a novel approach to reduce and/or prevent islet amyloid deposition in type 2 diabetes.