This is a renewal grant submission requesting funding for Year 2 to develop a promising series of small molecule inhibitors of the C-terminal D664 cleavage of APP - identified in Year 1- as lead candidates. The inhibitors have low molecular weights and other physical-chemical properties predictive of enhanced brain permeability. We plan to further optimize these molecules in the Year 2 for in vivo testing in our AD mouse model. We are developing a new approach to treat Alzheimer's disease (AD): we have discovered that the intracellular C-terminal cleavage of APP plays a key role in AD, and therefore represents a potential target for drug discovery. When the amyloid-beta molecule that is characteristic of AD is produced, it is cut from the middle of a much larger molecule, called APP, for amyloid precursor protein (the cuts are made by molecular scissors called proteases). We found that APP also gives rise to a second molecule through an intracellular cleavage that is near the very end of APP, and we called this APP-C31, since it represents the 31 amino acids at the C-terminus of APP. Importantly, when we made transgenic mice with a human AD gene but prevented this APP-C31, Alzheimer's was reversed: even though the mice had many amyloid-beta plaques characteristic of Alzheimer's disease, they had no memory loss, no brain shrinkage, and no loss of brain connections. These results suggested that we could develop a treatment that blocks this same cleavage of APP as a therapeutic for AD. Using the Year 1 grant funding, for which we are grateful, we have identified two small molecule 'hits' that cause a reduction in ALL of the Alzheimer's-related peptides--Abeta, APP-C31, Jcasp, and sAPPbeta--and an increase in all of the anti-Alzheimer's peptides--sAPPalpha, p3, and AICD. Making these two superb candidates for further testing towards the development of a new class of therapeutics that can reverse the AD phenotype.