The invention involves identification of a mechanism of .beta.-amyloid peptide cytotoxicity, which enables treatment of conditions caused by .beta.-amyloid peptide aggregates by administration of compounds which antagonize the mechanism of cytotoxicity. The invention includes the identification and isolation of compounds which can reduce the neurotoxic effects of such aggregates. Methods for treating conditions resulting from neurotoxic .beta.-amyloid peptide aggregates, such as Alzheimer's disease and pharmaceutical preparations are provided. Also provided are methods for selecting additional compounds which can reduce the neurotoxic effects of .beta.-amyloid aggregates.