To understand the mechanism underlying cognitive deficits in AIDS patients, we examined the influence of gp41 peptides on the expression and the secretion of Alzheimer's amyloid precursor protein (APP) in human astroglial cell line T98G. Western blotting analyses demonstrated that treatment of glial cells with a putative immunosuppressive domain (aa 583-599) of gp41 remarkably downregulated the interleukin 1beta- (IL-1beta) induced elevation of the secreted form of APP (sAPP alpha) containing Kunitz-type protease inhibitor (KPI) domain without significant changes of the expression pattern of APP mRNAs as revealed by reverse transcriptase polymerase chain reaction (RT-PCR) analysis. Recombinant gp41 protein encoding for ectodomain, including aa 583-599 residues, also elicited a similar dose-dependent inhibitory effect, whereas the control peptides resulted in little change. The molecular mechanism underlying this gp41-mediated reduction of sAPP alpha secretion appears not to be owing to the difference in the function of extracellular proteases based on the finding of similar proteolytic activities responsible for APP metabolism in vitro present in the conditioned media from the cultures treated with or without gp41 peptide. However, the known PKC inhibitors such as H-7 or staurosporine, partially inhibited the elevation of sAPP alpha secretion in response to protein kinase C (PKC) agonist phorbol 12,13-dibutyrate (PdBu) as well as to IL-1beta, mimicking the immunosuppressive gp41 peptide. These observations implicate that part of the neurodegenerative cascade in AIDS brains may involve the inhibitory effect of gp41 on secretion of sAPP alpha, a potent glial neurotrophic factor, through impaired PKC response.