Mutations in the genes for the beta-amyloid precursor protein (beta- APP), a type 1 single-membrane spanning integral protein, and the more recently identified closely homologous seven-membrane spanning integral proteins S182 and STM2, together account for all early-onset familial Alzheimer's disease. The normal functions of the three proteins are not known nor do we know how their functions are implicated in the disease. They recently proposed (Science, 271, 159-160, 1996) based on precedents in other system of an integral proteins, that one or more forms of beta-APP and S182 (or STM2) may normally be components of an intercellular signaling system. Beta-APP and S182 or STM2 on the surfaces of neighboring cells would bind to one another specifically through their extra-cellular domains protruding from the dell membranes, beta-amyloid (Abeta) being a proteolytic by-product of this interaction. To test this proposal full-length cDNAs for S182 and STM2 were cloned by PCR and subcloned into pcDNA3. Beta- APP695 cDNA was also subcloned into pcDNA3 and the constructs were used to transiently transfect cultured cells. Polyclonal antibodies raised to peptide sequences of STM2 and S182 demonstrated the presence of the two proteins at the surface of transfected cells. In order to determine if STM2 or S182 on one cell interacts with beta- APP on another, transfected cells expressing STM2 or S182 were mixed with cells expressing beta-APP. Heterotypic cell aggregates were formed, as shown by double labeling with antibodies to beta-APP and STM2 (or S182). Furthermore, this aggregation could be inhibited by excess soluble beta-APP, indicating specificity of the interaction. Our work provides evidence for the direct physical interaction of beta- APP with STM2 and S182, which may be crucial to the generation of Abeta and the genesis of Alzheimer's disease. To further test our hypothesis, in this application we propose, among other things, to investigate if transcellular binding between beta-APP and S182/STM2 results in vesicular internalization of the two proteins, the release of more or longer form of Abeta and normal signaling.