Accumulation of the amyloid-beta peptide (Abeta) in the brain is crucial for development of Alzheimer's disease. Expression of transforming growth factor-beta1 (TGF-beta1), an immunosuppressive cytokine, has been correlated in vivo with Abeta accumulation in transgenic mice and recently with Abeta clearance by activated microglia. Here, we demonstrate that TGF-beta1 drives the production of Abeta40/42 by astrocytes leading to Abeta production in TGF-beta1 transgenic mice. First, TGF-beta1 induces the overexpression of the amyloid precursor protein (APP) in astrocytes but not in neurons, involving a highly conserved TGF-beta1-responsive element in the 5'-untranslated region (+54/+74) of the APP promoter. Second, we demonstrated an increased release of soluble APP-beta which led to TGF-beta1-induced Abeta generation in both murine and human astrocytes. These results demonstrate that TGF-beta1 potentiates Abeta production in human astrocytes and may enhance the formation of plaques burden in the brain of Alzheimer's disease patients.