We have analyzed the metabolic pathway of maturation of APP751 in stably transfected 293 cells, in the presence of either of the cysteine protease inhibitors leupeptin or E-64. Metabolic labeling, followed by immunoprecipitation at various times in the chase with a rabbit polyclonal antibody (anti-BX6) specific to the carboxyl-terminal end of amyloid precursor protein (APP), revealed the accumulation of a novel approximately 22-kDa carboxyl-terminal fragment (22-CTF) in the inhibitor-treated cells. This fragment, which was not detectable in untreated cells, was immunoprecipitated by four separate antibodies to the carboxyl-terminal region of APP as well as by polyclonal and monoclonal antibodies specific to the first 16 amino acids of the beta-peptide domain. Antibodies to the amino-terminal end of APP do not, however, recognize the fragment. Co-treatment of the inhibitor-treated cells with either of the lysosomotropic agents chloroquine or ammonium chloride completely blocked the generation of this fragment but did not significantly affect APP maturation or secretion. All, however, slowed the intracellular turnover of the cell-associated, approximately 9-kDa carboxyl-terminal fragment (c-CTF) produced during constitutive secretion. Densitometric analyses of these results suggest that this non-secretory pathway of APP degradation, mediated by cysteine proteases in an intracellular acidic compartment, accounts for approximately 70% of total APP metabolism and that a key processing intermediate in this pathway is a 22-kDa, beta-peptide-containing APP carboxyl-terminal fragment. It is possible that inefficient degradation of such an intermediate leads to the formation of aggregating beta-peptide.