The beta-amyloid peptide (Abeta) that accumulates in senile plaques in Alzheimer's disease is formed by cleavage of the amyloid precursor protein (APP). The APP gene has several intronic Alu elements inserted in either the sense or antisense orientation. In this study, we demonstrate that binding of SC35 and hnRNPA1 to Alu elements on either side of exon 7 in the transcribed pre-mRNA is involved in alternative splicing of APP exons 7 and 8. Neuronal cells transfected with the full-length form of APP secrete higher levels of Abeta than cells transfected with the APP695 isoform lacking exons 7 and 8. Finally, we show that treatment of neuronal cells with estradiol results in increased expression of APP695, SC35 and hnRNPA1, and lowers the level of secreted Abeta. An understanding of the regulation of splicing of APP may lead to the identification of new targets for treating Alzheimer's disease.