Provided is a novel use of therapeutic concentrations of an inhibitor of glycogen synthase kinase-3 (GSK-3), including lithium or any other GSK-3 inhibitor, to block, reduce or inhibit processing of amyloid precursor proteins to beta-amyloid (A.beta.) peptides, which are now believed to be the principal cause of Alzheimer's disease, thereby providing methods useful for the prevention, inhibition or reversal of the disease. Also provided are methods of using agents that specifically target the .alpha. isoform of GSK-3, which is responsible for APP processing, making such selective GSK-3.alpha.-specific inhibitors especially useful in the treatment, prevention, and possible reversal of Alzheimer's disease. Further provided are kits and screening methods associated with the present methods.