This study was undertaken to localize amyloid precursor protein (APP) and to determine how APP might be released and proteolyzed to yield the beta-amyloid protein deposits found in senile plaques in the brains of Alzheimer's disease patients. We found that antibodies to recombinantly expressed APP labeled many normal neurons and neurites. In addition, dystrophic neurites in different types of senile plaques and degenerating neurons in the temporal cortex and hippocampus of Alzheimer's disease patients were immunostained. We also detected small clusters of dystrophic APP immunoreactive neurites that were not associated with beta-amyloid protein deposits. Microglia was involved in different types of senile plaques and often were associated closely with APP immunoreactive neurites and neurons. The greatest concurrence of APP immunoreactivity and reactive microglia was seen in the subiculum and area CA1, regions with a high density of congophilic plaques and subject to intense Alzheimer's pathology. Our findings suggest that neuronally derived APP is the source for senile plaque beta-amyloid protein, while microglia may act as processing cells.