Epidemiological evidence suggests that long term treatment with hydroxymethylglutaryl-CoA reductase inhibitors, or statins, decreases the risk for developing Alzheimer disease (AD). However, statin-mediated AD protection cannot be fully explained by reduction of cholesterol levels. In addition to their cholesterol lowering effects, statins have pleiotropic actions and act to lower the concentrations of isoprenoid intermediates, such as geranylgeranyl pyrophosphate and farnesyl pyrophosphate. The Rho and Rab family small G-proteins require addition of these isoprenyl moieties at their C termini for normal GTPase function. In neuroblastoma cell lines, treatment with statins inhibits the membrane localization of Rho and Rab proteins at statin doses as low as 200 nm, without affecting cellular cholesterol levels. In addition, we show for the first time that at low, physiologically relevant, doses statins preferentially inhibit the isoprenylation of a subset of GTPases. The amyloid precursor protein (APP) is proteolytically cleaved to generate beta-amyloid (Abeta), which is the major component of senile plaques found in AD. We show that inhibition of protein isoprenylation by statins causes the accumulation of APP within the cell through inhibition of Rab family proteins involved in vesicular trafficking. Moreover, inhibition of Rho family protein function reduces levels of APP C-terminal fragments due to enhanced lysosomal dependent degradation. Statin inhibition of protein isoprenylation results in decreased Abeta secretion. In summary, we show that statins selectively inhibit GTPase isoprenylation at clinically relevant doses, leading to reduced Abeta production in an isoprenoid-dependent manner. These studies provide insight into the mechanisms by which statins may reduce AD pathogenesis.