Our first generation of hydroxyethylamine transition-state mimetic BACE-1 inhibitors allowed us to validate BACE-1 as a key target for Alzheimer's disease by demonstrating amyloid lowering in an animal model, albeit at rather high doses. Finding a molecule from this series which was active at lower oral doses proved elusive and demonstrated the need to find a novel series of inhibitors with improved pharmacokinetics. This Letter describes the discovery of such inhibitors.