Amyloid precursor protein (APP) is genetically linked to Alzheimer's disease. APP is a type I membrane protein, and its oligomeric structure is potentially important because this property may play a role in its function or affect the processing of the precursor by the secretases to generate amyloid ß-peptide. Several independent studies have shown that APP can form dimers in the cell, but how it dimerizes remains controversial. At least three regions of the precursor, including a centrally located and conserved domain called E2, have been proposed to contribute to dimerization. Here we report two new crystal structures of E2, one from APP and the other from APLP1, a mammalian APP homologue. Comparison with an earlier APP structure, which was determined in a different space group, shows that the E2 domains share a conserved and antiparallel mode of dimerization. Biophysical measurements in solution show that heparin binding induces E2 dimerization. The 2.1 Å resolution electron density map also reveals phosphate ions that are bound to the protein surface. Mutational analysis shows that protein residues interacting with the phosphate ions are also involved in heparin binding. The locations of two of these residues, Arg-369 and His-433, at the dimeric interface suggest a mechanism for heparin-induced protein dimerization.