Alzheimer's disease (AD) is a complex neurodegenerative disorder characterized 
by extracellular plaques containing amyloid β (Aβ)-protein and intracellular 
tangles containing hyperphosphorylated Tau protein. Here, we describe the 
generation of inducible pluripotent stem cell lines from patients harboring the 
London familial AD (fAD) amyloid precursor protein (APP) mutation (V717I). We 
examine AD-relevant phenotypes following directed differentiation to forebrain 
neuronal fates vulnerable in AD. We observe that over differentiation time to 
mature neuronal fates, APP expression and levels of Aβ increase dramatically. In 
both immature and mature neuronal fates, the APPV717I mutation affects both β- 
and γ-secretase cleavage of APP. Although the mutation lies near the γ-secretase 
cleavage site in the transmembrane domain of APP, we find that β-secretase 
cleavage of APP is elevated leading to generation of increased levels of both 
APPsβ and Aβ. Furthermore, we find that this mutation alters the initial 
cleavage site of γ-secretase, resulting in an increased generation of both Aβ42 
and Aβ38. In addition to altered APP processing, an increase in levels of total 
and phosphorylated Tau is observed in neurons with the APPV717I mutation. We 
show that treatment with Aβ-specific antibodies early in culture reverses the 
phenotype of increased total Tau levels, implicating altered Aβ production in 
fAD neurons in this phenotype. These studies use human neurons to reveal 
previously unrecognized effects of the most common fAD APP mutation and provide 
a model system for testing therapeutic strategies in the cell types most 
relevant to disease processes.