Amyloid β peptide (Aβ) plays a major role in the pathogenesis of Alzheimer's disease (AD). Aβ is toxic to neurons, possibly through causing initial synaptic dysfunction and neuronal membrane dystrophy, promoted by increased cellular Ca²⁺. Calpain (Ca²⁺-dependent protease) and caspase have been implicated in AD. Previously, we used calpain and caspase pharmacological inhibitors to study effects of Aβ25–35 (sAβ) on neuronal-like differentiated PC12 cells. We reported that sAβ-treated cells exhibited calpain activation and protein degradation (due to both calpain and caspase-8). We have now found that overexpression of the calpain specific inhibitor calpastatin in differentiated PC12 cells significantly inhibited the sAβ-induced calpain activation and decreased the protease activity. Calpastatin overexpression inhibited the sAβ-promoted degradation of fodrin, protein kinase Cε, β-catenin (membrane structural proteins and proteins involved in signal transduction pathways), and prevented the sAβ-induced alteration of neurite structure (manifested by varicosities). Overexpression of calpastatin also inhibited Ca²⁺-promoted calpain activation and protein degradation; this is consistent with the notion that the Aβ-induced increase in calpain activity results from a rise in cellular Ca²⁺, provided the calpastatin level is not so high as to strongly inhibit calpain. Carrying out transfection without selection allowed the comparison in the same culture of calpastatin-overexpressing with non-overexpressing cells. In cultures transfected with green fluorescent protein (GFP)–calpastatin plasmid, calpastatin overexpression (indicated by GFP-labeling) led to inhibition in sAβ-induced membrane propidium iodide (PI) permeability, whereas non-transfected, GFP-unlabeled cells exhibited PI permeability. Overall, the results demonstrate that the effects of Aβ-toxicity studied here were attenuated to a large extent by calpastatin overexpression, indicating that the protease calpain is involved in Aβ-toxicity (obviating a primary, direct role for caspases). Increased expression of calpastatin and/or decrease in calpain may serve as one of the means for ameliorating some of the early symptoms of AD.