The low density lipoprotein (LDL) receptor-related protein 1B (LRP1B) is a newly identified member of the LDL receptor family that shares high homology with the LDL receptor-related protein (LRP). LRP1B was originally described as a putative tumor suppressor in lung cancer cells; however, its expression profile in several regions of adult human brain suggests it may have additional functions in the central nervous system. Since LRP1B has overlapping ligand binding properties with LRP, we investigated whether LRP1B, like LRP, could interact with the beta-amyloid precursor protein (APP) and modulate its processing to amyloid-beta peptides (Abetas). Using an LRP1B minireceptor (mLRP1B4) generated to study the trafficking of LRP1B, we found that mLRP1B4 and APP form an immunoprecipitable complex. Furthermore mLRP1B4 bound and facilitated the degradation of a soluble isoform of APP containing a Kunitz proteinase inhibitor domain but not soluble APP lacking a Kunitz proteinase inhibitor domain. A functional consequence of mLRP1B4 expression was a significant accumulation of APP at the cell surface, which is likely related to the slow endocytosis rate of LRP1B. More importantly, mLRP1B4-expressing cells that accumulated cell surface APP produced less Abeta and secreted more soluble APP. These findings reveal that LRP1B is a novel binding partner of APP that functions to decrease APP processing to Abeta. Consequently LRP1B expression could function to protect against the pathogenesis of Alzheimer's disease.