Protease nexin-II (PN-II) is a protease inhibitor that forms SDS-resistant inhibitory complexes with the epidermal growth factor (EGF)-binding protein, the gamma-subunit of nerve growth factor, and trypsin. The properties of PN-II indicate that it has a role in the regulation of certain proteases in the extracellular environment. Here we describe more of the amino-acid sequence of PN-II and its identity to the deduced sequence of the amyloid beta-protein precursor (APP). Amyloid beta-protein is present in neuritic plaques and cerebrovascular deposits in individuals with Alzheimer's disease and Down's syndrome. A monoclonal antibody against PN-II (designated mAbP2-1) recognized PN-II in immunoblots of serum-free culture medium from human glioblastoma cells and neuroblastoma cells, as well as in homogenates of normal and Alzheimer's disease brains. In addition, mAbP2-1 stained neuritic plaques in Alzheimer's disease brain. PN-II was a potent inhibitor of chymotrypsin with an inhibition constant Ki of 6 x 10(-10)M. Together, these data demonstrate that PN-II and APP are probably the same protein. The regulation of extracellular proteolysis by PN-II and the deposition of at least parts of the molecule in senile plaques is consistent with previous reports that implicate altered proteolysis in the pathogenesis of Alzheimer's disease.