Alzheimer's disease (AD) is the fourth major cause of mortality in the elderly in the US and the leading cause of dementia worldwide. While pharmacological targets have been discovered, there are no true disease-modifying therapies. We have recently discovered that multiple low-dose infusions of human umbilical cord blood cells (HUCBCs) ameliorate cognitive impairments and reduce Aβ-associated neuropathology in PSAPP transgenic mice. However, the mechanism for these effects of HUCBCs remains unclear. In the present study, we examined whether monocytes, as important components of HUCBCs, would have beneficial outcomes on the reduction of AD-like pathology and associated cognitive impairments in PSAPP transgenic AD model mice. PSAPP mice and their wild-type littermates were treated monthly with an infusion of peripheral human umbilical cord blood cell (HUCBC)-derived monocytes over a period of 2 and 4 months, followed by behavioral evaluations, biochemical, and histological analyses. The principal findings of the present study confirmed that monocytes derived from HUCBCs (CB-M) play a central role in HUCBC-mediated cognition-enhancing and Aβ pathology-ameliorating activities. Most importantly, we found that compared with CB-M, aged monocytes showed an ineffective phagocytosis of Aβ, while exogenous soluble amyloid precursor protein α (sAPPα) could reverse this deficiency. Pretreating monocytes with sAPPα upregulates Aβ internalization. Our further studies suggested that sAPPα could form a heterodimer with Aβs, with the APP672-688 (Aβ1-16) region being responsible for this effect. This in turn promoted binding of these heterodimers to monocyte scavenger receptors and thus promoted enhanced Aβ clearance. In summary, our findings suggest an interesting hypothesis that peripheral monocytes contribute to Aβ clearance through heterodimerization of sAPPα with Aβ. Further, declined or impaired sAPPα production, or reduced heterodimerization with Aβ, would cause a deficiency in Aβ clearance and thus accelerate the pathogenesis of AD.