Secreted amyloid precursor protein-alpha (sAPP alpha) levels are reduced during the pathogenesis of Alzheimer's disease, but the significance of this for neural function is not well understood. Here, we show that intrahippocampal infusion of antibodies targeted to endogenous sAPP alpha reduced long-term potentiation (LTP) in the dentate gyrus of adult rats by approximately 50%. Conversely, infusion of recombinant sAPP alpha dose-dependently increased LTP and facilitated in vitro tetanically evoked NMDA receptor-mediated currents. Pharmacological inhibition of alpha-secretase and other a-disintegrin-and-metalloproteases by TAPI-1 reduced both LTP and tetanus-evoked NMDA receptor-mediated currents in dentate granule cells. Both effects were prevented by co-application of exogenous recombinant sAPP alpha. Similarly, spatial memory was inhibited by intrahippocampal TAPI-1, an effect that was prevented by co-application of recombinant sAPP alpha. Together these findings indicate that endogenous sAPP alpha is a key contributor to synaptic plasticity and spatial memory. Its reduced production in Alzheimer's disease may thus contribute to the clinical memory deficits.