A common feature of Alzheimer's disease pathology is an abundance of activated glia, indicative of an inflammatory reaction in the brain. The relationship between glial activation and neurodegeneration is not known, although several cytokines and inflammatory mediators produced by activated glia have the potential to initiate or exacerbate the progression of neuropathology. As β-amyloid (Aβ) is one of several stimuli that can activate glia, it is important to determine how Aβ-induced glial activation is influenced by other proteins present in the plaque, such as apolipoprotein E (apoE). We examined the effect of native preparations of apoE on activation of rat cortical astrocyte cultures by Aβ1-42. The apoE source was conditioned medium from human embryonic kidney 293 cells stably transfected with human apoE3 or apoE4 cDNA. By morphological criteria, apoE inhibited Aβ-induced astrocyte activation in three experimental paradigms: apoE pretreatment blocked subsequent Aβ-induced activation, Aβ aged in the presence of apoE did not activate astrocytes, and apoE addition to activated astrocytes transiently reversed the activated phenotype. No apoE isoform selectivity was observed. The effect of apoE appears to be specific to Aβ, as apoE did not attenuate cyclic AMP-induced astrocyte activation. These data suggest that apoE may modulate the ability of Aβ to induce inflammatory responses in the brain.