Pathophysiologic hypotheses for Alzheimer's disease (AD) are centered on the role of the amyloid plaque Abeta peptide and the mechanism of its derivation from the amyloid precursor protein (APP). As part of the disease process, an aberrant axonal sprouting response is known to occur near Abeta deposits. A Nogo to Nogo-66 receptor (NgR) pathway contributes to determining the ability of adult CNS axons to extend after traumatic injuries. Here, we consider the potential role of NgR mechanisms in AD. Both Nogo and NgR are mislocalized in AD brain samples. APP physically associates with the NgR. Overexpression of NgR decreases Abeta production in neuroblastoma culture, and targeted disruption of NgR expression increases transgenic mouse brain Abeta levels, Abeta plaque deposition, and dystrophic neurites. Infusion of a soluble NgR fragment reduces Abeta levels, amyloid plaque deposits, and dystrophic neurites in a mouse transgenic AD model. Changes in NgR level produce parallel changes in secreted APPalpha and Abeta, implicating NgR as a blocker of secretase processing of APP. The NgR provides a novel site for modifying the course of AD and highlights the role of axonal dysfunction in the disease.