Growing evidence supports the hypothesis that soluble, diffusible forms of the amyloid β-peptide (Aβ) are pathogenically important in Alzheimer's disease (AD) and thus have both diagnostic and therapeutic salience. To learn more about the dynamics of soluble Aβ economy in vivo, we used microdialysis to sample the brain interstitial fluid (ISF), which contains the most soluble Aβ species in brain at steady state, in >40 wake, behaving APP transgenic mice before and during the process of Aβ plaque formation (age 3-28 months). Diffusible forms of Aβ, especially Aβ(42), declined significantly in ISF as mice underwent progressive parenchymal deposition of Aβ. Moreover, radiolabeled Aβ administered at physiological concentrations into ISF revealed a striking difference in the fate of soluble Aβ in plaque-rich (vs plaque-free) mice: it clears more rapidly from the ISF and becomes more associated with the TBS-extractable pool, suggesting that cerebral amyloid deposits can rapidly sequester soluble Aβ from the ISF. Likewise, acute γ-secretase inhibition in plaque-free mice showed a marked decline of Aβ(38), Aβ(40), and Aβ(42), whereas in plaque-rich mice, Aβ(42) declined significantly less. These results suggest that most of the Aβ(42) that populates the ISF in plaque-rich mice is derived not from new Aβ biosynthesis but rather from the large reservoir of less soluble Aβ(42) in brain parenchyma. Together, these and other findings herein illuminate the in vivo dynamics of soluble Aβ during the development of AD-type neuropathology and after γ-secretase inhibition and help explain the apparent paradox that CSF Aβ(42) levels fall as humans develop AD.