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Hyperammonemia is known to cause various neurological dysfunctions such as seizures and cognitive impairment. Several studies have suggested that hyperammonemia may also be linked to the development of Alzheimer's disease (AD). However, the direct evidence for a role of ammonia in the pathophysiology of AD remains to be discovered. Herein, we report that hyperammonemia increases the amount of mature amyloid precursor protein (mAPP) in astrocytes, the largest and most prevalent type of glial cells in the central nervous system that are capable of metabolizing glutamate and ammonia, and promotes amyloid beta (Aβ) production. We demonstrate the accumulation of mAPP in astrocytes was primarily due to enhanced endocytosis of mAPP from the plasma membrane. A large proportion of internalized mAPP was targeted not to the lysosome, but to the endoplasmic reticulum, where processing enzymes β-secretase BACE1 (beta-site APP cleaving enzyme 1) and γ-secretase presenilin-1 are expressed, and mAPP is cleaved to produce Aβ. Finally, we show the ammonia-induced production of Aβ in astrocytic endoplasmic reticulum was specific to Aβ42, a principal component of senile plaques in AD patients. Our studies uncover a novel mechanism of Aβ42 production in astrocytes and also provide the first evidence that ammonia induces the pathogenesis of AD by regulating astrocyte function.