The appearance of inflammatory markers associated with amyloid plaques indicates a state of chronic inflammation in Alzheimer's disease (AD). Multiple epidemiological studies also suggest that patients taking anti-inflammatory drugs have a decreased risk of developing AD. Here we present evidence that inflammatory cytokines can alter the metabolism of the beta-amyloid precursor protein (betaAPP). We show that the combination of tumor necrosis factor alpha and interferon gamma triggers the production of beta-amyloid peptides and inhibits the secretion of soluble APPs by human neuronal and extraneuronal cells. The results demonstrate a new mechanism by which inflammatory components can exacerbate the fundamental pathology in AD.