Neurons, but not astrocytes, are known as the major source of Abeta, because astrocytes express low levels of putative beta-secretase (BACE). Astrocytes near senile plaque cores show enhanced levels of BACE protein expression, however, suggesting that astrocytes can contribute to Abeta production under pathological conditions. To investigate factors that stimulate BACE protein expression in astrocytes, we tested the effects of interleukin-1beta (IL-1beta) and interferon-gamma (IFN-gamma) on BACE protein expression in U373MG astrocytoma cells and primary astrocyte cultures from Tg2576 mouse brains. BACE protein expression and sAPPbeta production were dramatically increased, without changes in holo APP levels, following IFN-gamma treatment in both cell types. AG490, which is a blocker of IFN-gamma-induced STAT signaling, decreased IFN-gamma-induced BACE protein expression and sAPPbeta production in a dose-dependent manner. These results show that astrocytes are capable of expressing BACE and producing sAPPbeta in response to certain stimulating factors, and IFN-gamma is one such factor.