A key event in Alzheimer's disease (AD) pathogenesis is the conversion of the peptide beta-amyloid (Abeta) from its soluble monomeric form into various aggregated morphologies in the brain. Preventing aggregation of Abeta is being actively pursued as a primary therapeutic strategy for treating AD. Trehalose, a simple disaccharide, has been shown to be effective in preventing the deactivation of numerous proteins and in protecting cells against stress. Here, we show that trehalose is also effective in inhibiting aggregation of Abeta and reducing its cytotoxicity, although it shows differential effects toward Abeta40 and Abeta42. When co-incubated with Abeta40, trehalose inhibits formation of both fibrillar and oligomeric morphologies as determined by fluorescence staining and atomic force microscopy (AFM). However, when co-incubated with Abeta42, trehalose inhibits formation only of the fibrillar morphology, with significant oligomeric formation still present. When aggregated mixtures were incubated with SH-SY5Y cells, trehalose was shown to reduce the toxicity of Abeta40 mixtures, but not Abeta42. These results provide additional evidence that aggregation of Abeta into soluble oligomeric forms is a pathological step in AD and that Abeta42 in particular is more susceptible to forming these toxic oligomers than Abeta40. These results also suggest that the use of trehalose, a highly soluble, low-priced sugar, as part of a potential therapeutic cocktail to control Abeta peptide aggregation and toxicity warrants further study.