Somatostatin and neuropeptide Y are two neuropeptides that are of particular in Alzheimer's disease because they are reported to be depleted in cerebral cortex. In the present study we examined somatostatin, neuropeptide Y, and nicotinamide adenine dinucleotide phosphate (NADPH) diaphorase neurons in nine cortical regions in both normal and Alzheimer's disease brains. These three neurochemical markers show a high degree of co-localization (> 90%) in nonpyramidal neurons that are primarily distributed in cortical layers II-III, V-VI, and, most prominently, in infracortical white matter. The highest cell density was in temporal and parietal association cortex. The major morphological abnormality in Alzheimer's disease brains was a marked pruning and distortion of fiber plexuses with an apparent reduction in fiber density. In contrast, perikaryal density was preserved except for a reduction in parietal association cortex. Approximately 10 to 15% of senile plaques in the inferior temporal gyrus contained abnormal neurites. Additional abnormal collections of neurites without plaque cores were frequently found in layers II-III and V-VI. Neuropeptide Y and somatostatin were co-localized in abnormal neurites, suggesting an origin from local intrinsic neurons in which the two peptides are co-localized. Double immunofluorescence staining for both tau protein, a major antigenic component of paired helical filaments, and either somatostatin or neuropeptide Y showed that these neurons do not contain tau-immunoreactive neurofibrillary tangles. The morphological correlate of reduced somatostatin and neuropeptide Y content in Alzheimer's disease brain therefore appears to be a distortion and reduction in fiber plexuses. In addition, it is apparent that these neurons can develop widespread morphological abnormalities in the absence of neurofibrillary tangle formation.