The deficits characteristic of Alzheimer's disease (AD) are believed to result, at least in part, from the neurotoxic effects of β-amyloid peptides, a set of 39–43 amino acid fragments derived proteolytically from β-amyloid precursor protein (APP). APP also is cleaved intracytoplasmically at Asp-664 to generate a second cytotoxic peptide, APP-C31, but whether this C-terminal processing of APP plays a role in the pathogenesis of AD is unknown. Therefore, we compared elements of the Alzheimer's phenotype in transgenic mice modeling AD with vs. without a functional Asp-664 caspase cleavage site. Surprisingly, whereas β-amyloid production and plaque formation were unaltered, synaptic loss, astrogliosis, dentate gyral atrophy, increased neuronal precursor proliferation, and behavioral abnormalities were completely prevented by a mutation at Asp-664. These results suggest that Asp-664 plays a critical role in the generation of Alzheimer-related pathophysiological and behavioral changes in human APP transgenic mice, possibly as a cleavage site or via protein–protein interactions.