The secreted form of Alzheimer amyloid beta/A4 protein precursor (APP) has been shown to be involved in cell growth regulation (Saitoh, T., Sundsmo, M., Roch, J.M., Kimura, N., Cole, G., Schubert, D., Oltersdorf, T., and Schenk, D. B. (1989) Cell 58, 615-622). Using a strong prokaryotic expression system, we expressed, in Escherichia coli, peptide fragments covering different regions of the secreted form of APP-695. The longest of these fragments (KB75, 572 amino acids from Val-20 to Ile-591), which contained neither the Kunitz-type protease inhibitor (KPI) domain nor the amyloid beta/A4-protein domain, was purified and shown to be biologically active in terms of growth regulation. Two other APP fragments (KB48, 316 amino acids from Val-20 to Met-335; and RB17, 150 amino acids from Thr-296 to Pro-445), overlapping by only 40 amino acids at a close site C-terminal to the KPI insertion site, were also active. Furthermore, a chemically synthesized 40-residue peptide corresponding to this region of overlap also stimulated the growth of A-1 fibroblasts. These results establish the presence of growth-promoting activity in the secreted form of APP-695 and suggest that the site of this activity of APP-695 lies within a 40-amino acid domain next to the KPI insertion site.