The colocalization of cystatin C, an inhibitor of cysteine proteases, with amyloid beta (Abeta) in parenchymal and vascular amyloid deposits in brains of Alzheimer's disease (AD) patients may reflect cystatin C involvement in amyloidogenesis. We therefore sought to determine the association of cystatin C with Abeta. Immunofluorescence analysis of transfected cultured cells demonstrated colocalization of cystatin C and beta amyloid precursor protein (betaAPP) intracellularly and on the cell surface. Western blot analysis of immunoprecipitated cell lysate or medium proteins revealed binding of cystatin C to full-length betaAPP and to secreted betaAPP (sbetaAPP). Deletion mutants of betaAPP localized the cystatin C binding site within betaAPP to the Abeta region. Cystatin C association with betaAPP resulted in increased sbetaAPP but did not affect levels of secreted Abeta. Analysis of the association of cystatin C and Abeta demonstrated a specific, saturable and high affinity binding between cystatin C and both Abeta(1-42) and Abeta(1-40). Notably, cystatin C association with Abeta results in a concentration-dependent inhibition of Abeta fibril formation.