Convergent biochemical and genetic evidence suggests that the formation of beta-amyloid (Abeta) deposits in the brain is an important and, probably, seminal step in the development of Alzheimer's disease (AD). Recent studies support the hypothesis that Abeta soluble oligomers are the pathogenic species that prompt the disease. Inhibiting Abeta self-oligomerization could, therefore, provide a novel approach to treating the underlying cause of AD. Here, we designed potential peptide-based aggregation inhibitors containing Abeta amino acid sequences (KLVFF) from part of the binding region responsible for Abeta self-association (residues 16-20), with RG-/-GR residues added at their N- and C-terminal ends to aid solubility. Two such peptides (RGKLVFFGR, named OR1, and RGKLVFFGR-NH2, named OR2) were effective inhibitors of Abeta fibril formation, but only one of these peptides (OR2) inhibited Abeta oligomer formation. Interestingly, this same OR2 peptide was the only effective inhibitor of Abeta toxicity toward human neuroblastoma SH-SY5Y cells. Our data support the idea that Abeta oligomers are responsible for the cytotoxic effects of Abeta and identify a potential peptide inhibitor for further development as a novel therapy for AD.