We have characterized the molecular species and subcellular distribution of Alzheimer beta/A4 amyloid precursor protein (APP) in neutrophilic granulocytes purified from human peripheral blood. APP was readily detectable in these cells. Immunochemical analysis with a panel of antibodies revealed that this APP species lacked the transmembrane and cytoplasmic domains previously demonstrated in cell-associated APP. However, it contained a protease inhibitor domain of the Kunitz type, indicating that neutrophil APP is a potent inhibitor of certain serine proteases. Upon subcellular fractionation, APP was primarily localized to azurophilic granules, which are neutrophil-specific phagocytic organelles assigned to enzymatic digestion of invading microbes and dead or injured tissue. Apparently, in the neutrophil, a nonsecretory organelle stores truncated, soluble APP, a species previously found only in blood plasma and cerebrospinal fluid or in conditioned medium of cultured cells. Soluble APP in neutrophils may therefore have intracellular functions in addition to its previously described extracellular functions. These findings also indicate that there are previously uncharacterized cell-specific differences in processing, trafficking, and storage of the APP molecule. Finally, the precise subcellular localization of APP to neutrophil-specific phagocytic organelles is suggestive of a role for APP in the nonimmunological host defense.