Reactive microglia associated with the β-amyloid plaques in Alzheimer's disease (AD) brains initiate a sequence of inflammatory events integral to the disease process. We have observed that fibrillar β-amyloid peptides activate a tyrosine kinase-based signaling response in primary mouse microglia and the human monocytic cell line, THP-1, resulting in production of neurotoxic secretory products, proinflammatory cytokines, and reactive oxygen species. We report that most of the amyloid-induced tyrosine kinase activity was stimulated after activation of Src family members such as Lyn. However, transduction of the signaling response required for increased production of the cytokines TNFα and IL1-β was mediated by the nonreceptor tyrosine kinase, Syk. Additionally, β-amyloid stimulated an NFκB-dependent pathway in parallel that was required for cytokine production. Importantly, TNFα generated by the monocytes and microglia was responsible for the majority of the neuorotoxic activity secreted by these cells after β-amyloid stimulation but must act in concert with other factors elaborated by microglia to elicit neuronal death. Moreover, we observed that the neuronal loss was apoptotic in nature and involved increased neuronal expression of inducible nitric oxide synthase and subsequent peroxynitrite production. Selective inhibitors of inducible nitric oxide synthase effectively protected cells from toxicity associated with the microglial and monocytic secretory products. This study demonstrates a functional linkage between β-amyloid-dependent activation of microglia and several characteristic markers of neuronal death occurring in Alzheimer's disease brains.