Here, we describe a novel missense mutation in the amyloid precursor protein (APP) causing a lysine-to-asparagine substitution at position 687 (APP770; herein, referred to as K16N according to amyloid-β (Aβ) numbering) resulting in an early onset dementia with an autosomal dominant inheritance pattern. The K16N mutation is located exactly at the α-secretase cleavage site and influences both APP and Aβ. First, due to the K16N mutation APP secretion is affected and a higher amount of Aβ peptides is being produced. Second, Aβ peptides carrying the K16N mutation are unique in that the peptide itself is not harmful to neuronal cells. Severe toxicity, however, is evident upon equimolar mixture of wt and mutant peptides, mimicking the heterozygous state of the subject. Furthermore, Aβ42 K16N inhibits fibril formation of Aβ42 wild-type. Even more, Aβ42 K16N peptides are protected against clearance activity by the major Aβ-degrading enzyme neprilysin. Thus the mutation characterized here harbours a combination of risk factors that synergistically may contribute to the development of early onset Alzheimer disease.