Alzheimer's disease (AD) is associated with accumulation of beta-amyloid (Abeta). A major genetic risk factor for sporadic AD is inheritance of the apolipoprotein (apo) E4 allele. ApoE can act as a pathological chaperone of Abeta, promoting its conformational transformation from soluble Abeta into toxic aggregates. We determined if blocking the apoE/Abeta interaction reduces Abeta load in transgenic (Tg) AD mice. The binding site of apoE on Abeta corresponds to residues 12 to 28. To block binding, we synthesized a peptide containing these residues, but substituted valine at position 18 to proline (Abeta12-28P). This changed the peptide's properties, making it non-fibrillogenic and non-toxic. Abeta12-28P competitively blocks binding of full-length Abeta to apoE (IC50 = 36.7 nmol). Furthermore, Abeta12-28P reduces Abeta fibrillogenesis in the presence of apoE, and Abeta/apoE toxicity in cell culture. Abeta12-28P is blood-brain barrier-permeable and in AD Tg mice inhibits Abeta deposition. Tg mice treated with Abeta12-28P for 1 month had a 63.3% reduction in Abeta load in the cortex (P = 0.0043) and a 59.5% (P = 0.0087) reduction in the hippocampus comparing to age-matched control Tg mice. Antibodies against Abeta were not detected in sera of treated mice; therefore the observed therapeutic effect of Abeta12-28P cannot be attributed to an antibody clearance response. Our experiments demonstrate that compounds blocking the interaction between Abeta and its pathological chaperones may be beneficial for treatment of beta-amyloid deposition in AD.