Secreted amyloid precursor protein (APPs) plays a role in several neuronal functions, including the promotion of synaptogenesis, neurite outgrowth and neuroprotection. Previous study has demonstrated that ganglioside GM1 inhibits the secretion of APPs; however the underlying mechanism remains unknown. Here we reported that GM1 can bind cellular full length APP and APPs secreted from APP(695) stably-transfected SH-SY5Y cells. To characterize the GM1-APP interaction further, we expressed and purified recombinant fragments of the N-terminal APP. Immunoprecipitation experiments revealed that GM1 was able to bind the recombinant APP(18-81) fragment. Moreover, the synthetic peptide APP(52-81) could inhibit the binding. Therefore, the binding site for GM1 appears to be located within residues 52-81 of APP. Furthermore, we found that only GM1, but not GD1a, GT1b and ceramide, binds APP-N-terminus, indicating that the specific binding depends on the sugar moiety of GM1. Fluorescent studies revealed a decrease in the intrinsic fluorescence intensity of the APP(52-81) peptide in phosphatidylcholine (PC)/GM1 vesicles. By using FTIR techniques, we found that the major secondary structure of the APP(52-81) peptide was altered in PC/GM1 vesicles. Our results demonstrate that GM1 binds the N-terminus of APP and induces a conformational change. These findings suggest that secreted APP is decreased by membrane GM1 binding to its precursor protein and provide a possible molecular mechanism to explain the involvement of GM1 in APP proteolysis and pathogenesis of Alzheimer's disease.