Many studies have yielded conflicting results regarding the toxicity of AB, the peptide which is the principal component of senile plaques in brains of patients with Alzheimer's disease. Using in vitro and in vivo models, we have studied the role of glial cells and extracellular matrix molecules m mediating the effects of AB. Glial cells respond to AB substrate by accumulating and depositing chondroitin sulfate proteoglycans (CSPGs) which are inhibitory to neurite outgrowth. CSPGs are present around the senile plaque core, an area with both dystrophic neurites and a general decrease in normal neurites. We suggest that CSPG may contribute to the pathology by leading to regenerative failure of neurites surrounding senile plaques.