Compositions comprising a novel protease capable of cleaving .beta.-amyloid precursor protein on the amino-terminal side of the .beta.-amyloid peptide therein are provided. The protease is designated .beta.-secretase. The .beta.-secretase may be used in screening assays to identify .beta.-secretase inhibitors, or the .beta.-secretase is combined with a suitable polypeptide substrate and cleavage of the substrate determined in the presence and absence of the test substance.