Disclosed is a method of using a compound as an inhibitor for .beta.-secretase, wherein the compound is capable of binding to the site within the .beta.-secretase recognition and/or cleavage site on amyloid precursor protein to specifically inhibit the .beta.-secretase's activity to cleave amyloid precursor protein with maintaining its activities to other substrates. Further, the present invention relates to inhibitors of amyloid precursor protein (APP) processing which bind to the site within the .beta.-secretase or .gamma.-secretase cleavage and/or recognition site on amyloid precursor protein.