Inhibition of the aspartyl protease BACE-1 has the potential to deliver a disease-modifying therapy for Alzheimer's disease. Herein, is described the lead generation effort which resulted, with the support of X-ray crystallography, in the discovery of potent inhibitors based on a hydroxy ethylamine (HEA) transition-state mimetic. These inhibitors were capable of lowering amyloid production in a cell-based assay.