Alzheimer's disease (AD) is characterized by the accumulation of β-amyloid (Aβ) peptides in extracellular plaques. The Aβ peptide is generated by the sequential cleavage of the amyloid precursor protein (APP) by β- and γ-secretases. β-secretase is primarily localized to endosomes, lysosomes, and the trans-Golgi network, while γ-secretase is found in early secretory and endocytic compartments. The availability of APP to either α- or β-secretase determines whether Aβ is generated. The lateral organization of membranes and subcellular localization of the substrate and secretases regulate Aβ generation. β-secretase associates with lipid rafts, and the integrity of raft domains is required for β-cleavage of APP. α-cleavage occurs outside raft domains. γ-secretase is also raft-associated, suggesting that amyloidogenic processing of APP could occur in clustered raft domains to generate Aβ. Inhibition of endocytosis reduces β-cleavage but not α-cleavage, suggesting that β-cleavage mainly occurs in endosomes. The release of Aβ peptides from the cell is crucial for their accumulation in extracellular plaques. This study shows that β-cleavage occurs in early endosomes, followed by routing of Aβ to multivesicular bodies (MVBs). A fraction of Aβ peptides is secreted from the cells in association with exosomes, which are intraluminal vesicles of MVBs released into the extracellular space upon fusion with the plasma membrane. Exosomal proteins, such as Alix, are found in amyloid plaques of AD patient brains, suggesting a role in AD pathogenesis. The study also shows that Aβ peptides are localized to MVBs and are released in association with exosomes. Exosomes are enriched in raft lipids and proteins and are involved in various functions, including scavenging of archaic proteins, signaling, and pathogen transmission. The findings suggest that exosome-associated Aβ could be involved in plaque formation. The study highlights the role of exosomes in the extracellular release of Aβ and their potential involvement in AD pathogenesis.Alzheimer's disease (AD) is characterized by the accumulation of β-amyloid (Aβ) peptides in extracellular plaques. The Aβ peptide is generated by the sequential cleavage of the amyloid precursor protein (APP) by β- and γ-secretases. β-secretase is primarily localized to endosomes, lysosomes, and the trans-Golgi network, while γ-secretase is found in early secretory and endocytic compartments. The availability of APP to either α- or β-secretase determines whether Aβ is generated. The lateral organization of membranes and subcellular localization of the substrate and secretases regulate Aβ generation. β-secretase associates with lipid rafts, and the integrity of raft domains is required for β-cleavage of APP. α-cleavage occurs outside raft domains. γ-secretase is also raft-associated, suggesting that amyloidogenic processing of APP could occur in clustered raft domains to generate Aβ. Inhibition of endocytosis reduces β-cleavage but not α-cleavage, suggesting that β-cleavage mainly occurs in endosomes. The release of Aβ peptides from the cell is crucial for their accumulation in extracellular plaques. This study shows that β-cleavage occurs in early endosomes, followed by routing of Aβ to multivesicular bodies (MVBs). A fraction of Aβ peptides is secreted from the cells in association with exosomes, which are intraluminal vesicles of MVBs released into the extracellular space upon fusion with the plasma membrane. Exosomal proteins, such as Alix, are found in amyloid plaques of AD patient brains, suggesting a role in AD pathogenesis. The study also shows that Aβ peptides are localized to MVBs and are released in association with exosomes. Exosomes are enriched in raft lipids and proteins and are involved in various functions, including scavenging of archaic proteins, signaling, and pathogen transmission. The findings suggest that exosome-associated Aβ could be involved in plaque formation. The study highlights the role of exosomes in the extracellular release of Aβ and their potential involvement in AD pathogenesis.