The apolipoprotein E gene (APOE) plays an important role in the pathogenesis of Alzheimer's disease (AD), and amyloid plaque comprised mostly of the amyloid-beta peptide (Aβ) is one of the major hallmarks of AD. However, the relationship between these two important molecules is poorly understood. We examined how Aβ treatment affects APOE expression in cultured cells and tested the role of the transcription factor NF-κB in APOE gene regulation. To delineate NF-κB's role, we have characterized a 1098 nucleotide (nt) segment containing the 5′-flanking region of the human APOE gene (-1054/+44, +1 transcription start site). Sequence analysis of this region suggests the presence of two potential NF-κB elements. To demonstrate promoter activity, the region was cloned upstream of a promoterless luciferase (reporter) gene. This segment was able to drive expression of luciferase in transient transfections of human fetal glial cells. Promoter activity was stimulated twofold by Aβ1-40 (25 μM, 24 h) treatment. Pretreatment with double-stranded DNA decoy oligonucleotides against NF-κB (2 μM) reduced Aβ stimulation. Deletion and mutagenetic analyses demonstrated that the distal NF-κB element was functional and showed a strong DNA-protein complex band in gel shift analysis, similar to that from control NF-κB consensus element. An anti-inflammatory and anti-NF-κB drug, sodium salicylate, significantly blocked Aβ-induced APOE promoter function. Our data provide evidence that upregulation of APOE by Aβ in astroglial cells is mediated by an NF-κB-element present in the 5′-flanking region of the APOE gene.