Reactive astrocytes surround amyloid depositions and degenerating neurons in Alzheimer's disease (AD). It has been previously shown that beta-amyloid peptide induces inflammatory-like responses in astrocytes, leading to neuronal pathology. Reactive astrocytes up-regulate nerve growth factor (NGF), which can modulate neuronal survival by signaling through TrkA or p75 neurotrophin receptor (p75NTR). Here, we analyzed whether soluble Abeta peptide 25-35 (Abeta) stimulated astrocytic NGF expression, modulating the survival of cultured embryonic hippocampal neurons. Hippocampal astrocytes incubated with Abeta up-regulated NGF expression and release to the culture medium. Abeta-stimulated astrocytes increased tau phosphorylation and reduced the survival of cocultured hippocampal neurons. Neuronal death and tau phosphorylation were reproduced by conditioned media from Abeta-stimulated astrocytes and prevented by caspase inhibitors or blocking antibodies to NGF or p75NTR. Moreover, exogenous NGF was sufficient to induce tau hyperphosphorylation and death of hippocampal neurons, a phenomenon that was potentiated by a low steady-state concentration of nitric oxide. Our findings show that Abeta-activated astrocytes potently stimulate NGF secretion, which in turn causes the death of p75-expressing hippocampal neurons, through a mechanism regulated by nitric oxide. These results suggest a potential role for astrocyte-derived NGF in the progression of AD.