Alzheimer's disease (AD) and type 2 diabetes (T2D) are linked to the self-association of β-amyloid peptide (Aβ) and islet amyloid polypeptide (IAPP), respectively. We have shown that IAPP-GI, a soluble IAPP analogue and mimic of nonamyloidogenic and nontoxic IAPP, binds Aβ with high affinity and blocks its cytotoxic self-assembly and fibrillogenesis. We have also shown that IAPP and Aβ interact with each other into nonfibrillar and nontoxic heterocomplexes that suppress cytotoxic self-association by both polypeptides. The Aβ-IAPP interaction might thus be a molecular link between AD and T2D. We studied the role of individual IAPP-GI and IAPP regions in their inhibitory function on Aβ40 self-association and cytotoxicity. We found that the presence of the two hot-spot regions of the Aβ-IAPP interaction interface in IAPP(8-28) is not sufficient for inhibitory function and that, in addition to IAPP(8-28), the presence of the N-terminal region IAPP(1-7) is absolutely required. By contrast, the C-terminal region, IAPP(30-37), is not required although its presence together with IAPP(1-7) in IAPP-GI results in a marked enhancement of the inhibitory effect as compared to IAPP(1-28)-GI. We suggest that the inhibitory effect of IAPP-GI and IAPP on Aβ40 fibrillogenesis and cell toxicity is mediated primarily by interactions involving the hot regions of the Aβ-IAPP interaction interface and the N terminus of IAPP while a concerted and likely structure-stabilizing action of the N- and C-terminal IAPP regions potentiates this effect. These results identify important molecular determinants of the amyloid suppressing function of the Aβ40-IAPP interaction and could contribute to the design of novel inhibitors of Aβ40 aggregation and cell degeneration.