BACE1 activity is significantly increased in the brains of Alzheimer's disease patients, potentially contributing to neurodegeneration. The voltage-gated sodium channel (Na_v1) β2-subunit (β2), a type I membrane protein that covalently binds to Na_v1 α-subunits, is a substrate for BACE1 and γ-secretase. Here, we find that BACE1–γ-secretase cleavages release the intracellular domain of β2, which increases mRNA and protein levels of the pore-forming Na_v1.1 α-subunit in neuroblastoma cells. Similarly, endogenous β2 processing and Na_v1.1 protein levels are elevated in brains of BACE1-transgenic mice and Alzheimer's disease patients with high BACE1 levels. However, Na_v1.1 is retained inside the cells and cell surface expression of the Na_v1 α-subunits and sodium current densities are markedly reduced in both neuroblastoma cells and adult hippocampal neurons from BACE1-transgenic mice. BACE1, by cleaving β2, thus regulates Na_v1 α-subunit levels and controls cell-surface sodium current densities. BACE1 inhibitors may normalize membrane excitability in Alzheimer's disease patients with elevated BACE1 activity.