Human genetic data have associated angiotensin-converting enzyme (ACE) with Alzheimer disease (AD), and purified ACE has been reported to cleave synthetic amyloid beta-protein (Abeta) in vitro. Whether deficiency in ACE activity, arising from genetic alteration or pharmacological inhibition, can decrease Abeta degradation and allow Abeta accumulation in intact cells is unknown. We cloned ACE from human neuroblastoma cells and showed that it had posttranslational processing and enzymatic activity typical of the endogenous protease. Cellular expression of ACE promoted degradation of naturally secreted Abeta40 and Abeta42, leading to significant clearance of both species. Using site-directed mutagenesis, we determined that both active sites within ACE contribute to Abeta clearance, and an ACE construct bearing mutations in each catalytic domain had no effect on Abeta levels. Pharmacological inhibition of ACE with a widely prescribed drug, captopril, promoted the accumulation of cell-derived Abeta in the media of beta-amyloid precursor-protein expressing cells. Together, these results show that ACE can lower the levels of secreted Abeta in living cells and that this effect is blocked by inhibiting the protease's activity with an ACE inhibitor. This work, combined with the genetic studies, supports the hypothesis that ACE may modulate the susceptibility to and progression of AD via degradation of Abeta. Our data encourage further analyses of the ACE gene for disease association and raise the question of whether currently prescribed ACE inhibitors could elevate cerebral Abeta levels in humans.