Beta-amyloid peptides (Abeta) are produced by a sequential cleavage of amyloid precursor protein (APP) by beta- and gamma-secretases. The lack of Abeta production in beta-APP cleaving enzyme (BACE1)(-/-) mice suggests that BACE1 is the principal beta-secretase in mammalian neurons. Transfection of human APP and BACE1 into neurons derived from wild-type and BACE1(-/-) mice supports cleavage of APP at the canonical beta-secretase site. However, these studies also revealed an alternative BACE1 cleavage site in APP, designated as beta', resulting in Abeta peptides starting at Glu11. The apparent inability of human BACE1 to make this beta'-cleavage in murine APP, and vice versa, led to the hypothesis that this alternative cleavage was species-specific. In contrast, the results from human BACE1 transgenic mice demonstrated that the human BACE1 is able to cleave the endogenous murine APP at the beta'-cleavage site. To address this discrepancy, we designed fluorescent resonance energy transfer peptide substrates containing the beta- and beta'-cleavage sites within human and murine APP to compare: (i) the enzymatic efficiency; (ii) binding kinetics of a BACE1 active site inhibitor LY2039911; and (iii) the pharmacological profiles for human and murine recombinant BACE1. Both BACE1 orthologs were able to cleave APP at the beta- and beta'-sites, although with different efficiencies. Moreover, the inhibitory potency of LY2039911 toward recombinant human and native BACE1 from mouse or guinea pig was indistinguishable. In summary, we have demonstrated, for the first time, that recombinant BACE1 can recognize and cleave APP peptide substrates at the postulated beta'-cleavage site. It does not appear to be a significant species specificity to this cleavage.