Site-specific proteolysis of the amyloid-beta precursor protein (APP) by BACE 1 and gamma-secretase, a central event in Alzheimer disease, releases a large secreted extracellular fragment (called APP(S)), peptides of 40-43 residues derived from extracellular and transmembrane sequences (Abeta), and a short intracellular fragment (APP intracellular domain) that may function as a transcriptional activator in a complex with the adaptor protein Fe65 and the nuclear protein Tip60. APP is closely related to APP-like protein (APLP) 1 and APLP2, but only APP is known to be cleaved by BACE 1 and to be involved in Alzheimer disease. We now demonstrate that similar to APP, APLP1 and APLP2 are also cleaved by BACE 1 but not by ADAM 9, another APP protease, and also transactivate nuclear Tip60 in a complex with Fe65. Paradoxically, although BACE 1 cleavage appears to be specific for APP and APLPs, their cleavage sequences exhibit no homology, and a short sequence (7 amino acids) from APP that when placed close to the membrane converts a membrane protein that is normally not cleaved by BACE 1 into a BACE 1 substrate. Our data demonstrate that APLPs and APP are processed similarly to act via the same nuclear target, suggesting that BACE 1 cleavage regulates a common function of APP and APLPs in neurons.