Microglial activation as part of a chronic inflammatory response is a prominent component of Alzheimer's disease. Secreted forms of the β-amyloid precursor protein (sAPP) previously were found to activate microglia, elevating their neurotoxic potential. To explore neurotoxic mechanisms, we analyzed microglia-conditioned medium for agents that could activate glutamate receptors. Conditioned medium from primary rat microglia activated by sAPP caused a calcium elevation in hippocampal neurons, whereas medium from untreated microglia did not. This response was sensitive to the NMDA receptor antagonist, aminophosphonovaleric acid. Analysis of microglia-conditioned by HPLC revealed dramatically higher concentrations of glutamate in cultures exposed to sAPP. Indeed, the glutamate levels in sAPP-treated cultures were substantially higher than those in cultures treated with amyloid β-peptide. This sAPP-evoked glutamate release was completely blocked by inhibition of the cystine–glutamate antiporter by α-aminoadipate or use of cystine-free medium. Furthermore, a sublethal concentration of sAPP compromised synaptic density in microglia–neuron cocultures, as evidenced by neuronal connectivity assay. Finally, the neurotoxicity evoked by sAPP in microglia-neuron cocultures was attenuated by inhibitors of either the neuronal nitric oxide synthase (NG-propyl-l-arginine) or inducible nitric oxide synthase (1400 W). Together, these data indicate a scenario by which microglia activated by sAPP release excitotoxic levels of glutamate, probably as a consequence of autoprotective antioxidant glutathione production within the microglia, ultimately causing synaptic degeneration and neuronal death.