The amyloid hypothesis states that a variety of neurotoxic β-amyloid (Aβ) species contribute to the pathogenesis of Alzheimer's disease. Accordingly, a key determinant of disease onset and progression is the appropriate balance between Aβ production and clearance. Enzymes responsible for the degradation of Aβ are not well understood, and, thus far, it has not been possible to enhance Aβ catabolism by pharmacological manipulation. We provide evidence that Aβ catabolism is increased after inhibition of plasminogen activator inhibitor-1 (PAI-1) and may constitute a viable therapeutic approach for lowering brain Aβ levels. PAI-1 inhibits the activity of tissue plasminogen activator (tPA), an enzyme that cleaves plasminogen to generate plasmin, a protease that degrades Aβ oligomers and monomers. Because tPA, plasminogen and PAI-1 are expressed in the brain, we tested the hypothesis that inhibitors of PAI-1 will enhance the proteolytic clearance of brain Aβ. Our data demonstrate that PAI-1 inhibitors augment the activity of tPA and plasmin in hippocampus, significantly lower plasma and brain Aβ levels, restore long-term potentiation deficits in hippocampal slices from transgenic Aβ-producing mice, and reverse cognitive deficits in these mice.