Peptides derived from proteolytic processing of the β-amyloid precursor protein (APP), including the amyloid-β peptide (Aβ), play a critical role in the pathogenesis of Alzheimer's dementia. We report that transgenic mice overexpressing APP and Aβ have a profound attenuation in the increase in neocortical blood flow elicited by somatosensory activation. The impairment is highly correlated with brain Aβ concentration and is reproduced in normal mice by topical neocortical application of exogenous Aβ1–40 but not Aβ1–42. Overexpression of M146L mutant presenilin-1 in APP mice enhances the production of Aβ1–42 severalfold, but it does not produce a commensurate attenuation of the hyperemic response. APP and Aβ overexpression do not diminish the intensity of neural activation, as reflected by the increase in somatosensory cortex glucose usage. Thus, Aβ-induced alterations in functional hyperemia produce a potentially deleterious mismatch between substrate delivery and energy demands imposed by neural activity.