The β-site amyloid precursor protein (APP)-cleaving enzyme 1 (β-secretase, BACE1) initiates amyloidogenic processing of APP to generate amyloid β (Aβ), which is a hallmark of Alzheimer disease (AD) pathology. Cerebral levels of BACE1 are elevated in individuals with AD, but the molecular mechanisms are not completely understood. We demonstrate that Rheb GTPase (Ras homolog enriched in brain), which induces mammalian target of rapamycin (mTOR) activity, is a physiological regulator of BACE1 stability and activity. Rheb overexpression depletes BACE1 protein levels and reduces Aβ generation, whereas the RNAi knockdown of endogenous Rheb promotes BACE1 accumulation, and this effect by Rheb is independent of its mTOR signaling. Moreover, GTP-bound Rheb interacts with BACE1 and degrades it through proteasomal and lysosomal pathways. Finally, we demonstrate that Rheb levels are down-regulated in the AD brain, which is consistent with an increased BACE1 expression. Altogether, our study defines Rheb as a novel physiological regulator of BACE1 levels and Aβ generation, and the Rheb-BACE1 circuitry may have a role in brain biology and disease.