One characteristic of Alzheimer's disease (A beta disease) is the accumulation of amyloid deposits within the extracellular space of the brain and meninges. A 40 amino acid peptide called beta-peptide or A4 protein is the subunit of the amyloid fibrils found in these deposits. The sequence of beta-peptide is contained within those of a family of larger proteins called the Alzheimer beta-amyloid peptide precursor (APP). These APPs contain, in addition to a signal sequence, a hydrophobic sequence that is believed to span cell membranes. Although biochemical studies indicate that some APPs have properties of integral membrane proteins, morphological confirmation of this has not been reported. We recently described an expression system in which human APP751 cDNA was placed under the transcriptional regulation of the polyhedrin gene promoter in the baculovirus Autographica californica infecting a Spodoptera frugiperda cell line (Ramakrishna et al., Biochem Biophys Res Commun 174:983-989, 1991). As part of a larger biochemical and molecular biological study of APP, we have carried out an immunocytochemical study using antibodies directed against several epitopes within APP to reveal, at both the light and the electron microscopic levels, the cellular localization of APP in the baculovirus expression system. These studies demonstrate that APP751 is abundantly synthesized and inserted into certain of the membrane compartments of the cell. As early as 24 hr postinfection, APP751 is found associated with all membrane compartments excepting mitochondrial membranes. The patterns of immunolabeling are consistent with our biochemical findings that the protein is processed in these cells so as to release the extracellular domain and to retain a transmembrane and intracellular segment. These data provide the first morphological demonstration of the membrane location of APP751, its posttranslational processing to a secreted fragment, and its exclusion from the mitochondrial membranes. This system is especially valuable for identifying conditions under which antibodies raised against APP or appropriate synthetic peptides will react with native APP.