The brain pathology of Alzheimer's disease is characterized by abnormally aggregated Abeta in extracellular beta-amyloid plaques and along blood vessel walls, but the relation to intracellular Abeta remains unclear. To address the role of intracellular Abeta deposition in vivo, we expressed human APP with the combined Swedish and Arctic mutations in mice (arcAbeta mice). Intracellular punctate deposits of Abeta occurred concomitantly with robust cognitive impairments at the age of 6 months before the onset of beta-amyloid plaque formation and cerebral beta-amyloid angiopathy. beta-Amyloid plaques from arcAbeta mice had distinct dense-core morphologies with blood vessels appearing as seeding origins, suggesting reduced clearance of Abeta across blood vessels in arcAbeta mice. The co-incidence of intracellular Abeta deposits with behavioral deficits support an early role of intracellular Abeta in the pathophysiological cascade leading to beta-amyloid formation and functional impairment.