Background: One of the key pathological features of AD is the formation of insoluble amyloid plaques. The major constituent of these extracellular plaques is the beta-amyloid peptide (Aβ), although Aβ is also found to accumulate intraneuronally in AD. Due to the slowly progressive nature of the disease, it is likely that neurons are exposed to sublethal concentrations of both intracellular and extracellular Aβ for extended periods of time. Results: In this study, we report that daily exposure to a sublethal concentration of Aβ1-40 (1 μM) for six days induces substantial apoptosis of cortical neurons cultured from Tg2576 mice (which express substantial but sublethal levels of intracellular Aβ). Notably, untreated Tg2576 neurons of similar age did not display any signs of apoptosis, indicating that the level of intracellular Aβ present in these neurons was not the cause of toxicity. Furthermore, wildtype neurons did not become apoptotic under the same chronic Aβ1-40 treatment. We found that this apoptosis was linked to Tg2576 neurons being unable to maintain K+ homeostasis following Aβ treatment. Furthermore, blocking K+ efflux protected Tg2576 neurons from Aβ-induced neurotoxicity. Interestingly, chronic exposure to 1 μM Aβ1-40 caused the generation of axonal swellings in Tg2576 neurons that contained dense concentrations of hyperphosphorylated tau. These were not observed in wildtype neurons under the same treatment conditions. Conclusions: Our data suggest that when neurons are chronically exposed to sublethal levels of both intra- and extra-cellular Aβ, this causes a K+-dependent neurodegeneration that has pathological characteristics similar to AD.