Estrogen reduces the risk of Alzheimer's disease in post-menopausal women, beta-amyloid (Abeta) burden in animal models of Alzheimer's disease, and secretion of Abeta from neuronal cultures. The biological basis for these effects remains unknown. Here, utilizing cell-free systems derived from both neuroblastoma cells and primary neurons, we demonstrate that 17beta-estradiol (17beta-E2) stimulates formation of vesicles containing the beta-amyloid precursor protein (betaAPP) from the trans-Golgi network (TGN). Accelerated betaAPP trafficking precludes maximal Abeta generation within the TGN. 17beta-E2 appears to modulate TGN phospholipid levels, particularly those of phosphatidylinositol, and to recruit soluble trafficking factors, such as Rab11, to the TGN. Together, these results suggest that estrogen may exert its anti-Abeta effects by regulating betaAPP trafficking within the late secretory pathway. These results suggest a novel mechanism through which 17beta-E2 may act in estrogen-responsive tissues and illustrate how altering the kinetics of the transport of a protein can influence its metabolic fate.