Overexpression of the amyloid precursor protein (APP) in hippocampal neurons leads to elevated beta-amyloid peptide (Abeta) production and consequent depression of excitatory transmission. The precise mechanisms underlying APP-induced synaptic depression are poorly understood. Uncovering these mechanisms could provide insight into how neuronal function is compromised before cell death during the early stages of Alzheimer's disease. Here we verify that APP up-regulation leads to depression of transmission in cultured hippocampal autapses; and we perform whole-cell recording, FM imaging, and immunocytochemistry to identify the specific mechanisms accounting for this depression. We find that APP overexpression leads to postsynaptic silencing through a selective reduction of alpha-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid (AMPA) receptor-mediated currents. This effect is likely mediated by Abeta because expression of mutant APP incapable of producing Abeta did not depress transmission. In addition, although we eliminate presynaptic silencing as a mechanism underlying APP-mediated inhibition of transmission, we did observe an Abeta-induced presynaptic deficit in vesicle recycling with sustained stimulation. These findings demonstrate that APP elevation disrupts both presynaptic and postsynaptic compartments.