Background: Cathepsin D (CatD) is a lysosomal protease that degrades both the amyloid beta-protein (A beta) and the microtubule-associated protein, tau, and has been genetically linked to late-onset Alzheimer disease (AD). Here, we sought to examine the consequences of genetic deletion of CatD on A beta proteostasis in vivo and to more completely characterize the degradation of A beta 42 and A beta 40 by CatD. Methods: We quantified A beta degradation rates and levels of endogenous A beta 42 and A beta 40 in the brains of CatD-null (CatD-KO), heterozygous null (CatD-HET), and wild-type (WT) control mice. CatD-KO mice die by similar to 4 weeks of age, so tissues from younger mice, as well as embryonic neuronal cultures, were investigated. Enzymological assays and surface plasmon resonance were employed to quantify the kinetic parameters (K-M,k(cat)) of CatD-mediated degradation of monomeric human A beta 42 vs. A beta 40, and the degradation of aggregated A beta 42 species was also characterized. Competitive inhibition assays were used to interrogate the relative inhibition of full-length human and mouse A beta 42 and A beta 40, as well as corresponding p3 fragments. Results: Genetic deletion of CatD resulted in 3- to 4-fold increases in insoluble, endogenous cerebral A beta 42 and A beta 40, exceeding the increases produced by deletion of an insulin-degrading enzyme, neprilysin or both, together with readily detectable intralysosomal deposits of endogenous A beta 42-all by 3 weeks of age. Quite significantly, CatD-KO mice exhibited similar to 30% increases in A beta 42/40 ratios, comparable to those induced by presenilin mutations. Mechanistically, the perturbed A beta 42/40 ratios were attributable to pronounced differences in the kinetics of degradation of A beta 42 vis-a-vis A beta 40. Specifically, A beta 42 shows a low-nanomolar affinity for CatD, along with an exceptionally slow turnover rate that, together, renders A beta 42 a highly potent competitive inhibitor of CatD. Notably, the marked differences in the processing of A beta 42 vs. A beta 40 also extend to p3 fragments ending at positions 42 vs. 40. Conclusions: Our findings identify CatD as the principal intracellular A beta-degrading protease identified to date, one that regulates A beta 42/40 ratios via differential degradation of A beta 42 vs. A beta 40. The finding that A beta 42 is a potent competitive inhibitor of CatD suggests a possible mechanistic link between elevations in A beta 42 and downstream pathological sequelae in AD.