Amyloid β-peptide (Aβ) is postulated to play a central role in the pathogenesis of Alzheimer’s disease. We recently proposed a pathway of Aβ-induced toxicity that is APP dependent and involves the facilitation of APP complex formation by Aβ. The APP-dependent component requires cleavage of APP at position 664 in the cytoplasmic domain, presumably by caspases or caspase-like proteases, with release of a potentially cytotoxic C31 peptide. In this study we show that Aβ interacted directly and specifically with membrane-bound APP to facilitate APP homo-oligomerization. Using chimeric APP molecules, this interaction was shown to take place between Aβ and its homologous sequence on APP. Consistent with this finding, we demonstrated that Aβ also facilitated the oligomerization of β-secretase cleaved APP C-terminal fragment (C99). We found that the YENPTY domain in the APP cytoplasmic tail and contained within C31 is critical for this cell death pathway. Deletion or alanine-scanning mutagenesis through this domain significantly attenuated cell death apparently without affecting either APP dimerization or cleavage at position 664. This indicated that sequences within C31 are required after its release from APP. As the YENPTY domain has been shown to interact with a number of cytosolic adaptor molecules, it is possible that the interaction of APP, especially dimeric forms of APP, with these molecules contribute to cell death.