Insulin-degrading enzyme (IDE) is an interesting pharmacological target for Alzheimer's disease (AD), since it hydrolyzes beta-amyloid, producing non-neurotoxic fragments. It has also been shown that the somatostatin level reduction is a pathological feature of AD and that it regulates the neprilysin activity toward beta-amyloid. In this work, we report for the first time that IDE is able to hydrolyze somatostatin [k(cat) (s(-1))=0.38 (+/-0.05); K(m) (M)=7.5 (+/-0.9) x 10(-6)] at the Phe6-Phe7 amino acid bond. On the other hand, somatostatin modulates IDE activity, enhancing the enzymatic cleavage of a novel fluorogenic beta-amyloid through a decrease of the K(m) toward this substrate, which corresponds to the 10-25 amino acid sequence of the Abeta(1-40). Circular dichroism spectroscopy and surface plasmon resonance imaging experiments show that somatostatin binding to IDE brings about a concentration-dependent structural change of the secondary and tertiary structure(s) of the enzyme, revealing two possible binding sites. The higher affinity binding site disappears upon inactivation of IDE by ethylenediaminetetraacetic acid, which chelates the catalytic Zn(2+) ion. As a whole, these features suggest that the modulatory effect is due to an allosteric mechanism: somatostatin binding to the active site of one IDE subunit (where somatostatin is cleaved) induces an enhancement of IDE proteolytic activity toward fluorogenic beta-amyloid by another subunit. Therefore, this investigation on IDE-somatostatin interaction contributes to a more exhaustive knowledge about the functional and structural aspects of IDE and its pathophysiological implications in the amyloid deposition and somatostatin homeostasis in the brain.