Short-term neural stem cell (NSC) transplantation improves cognition in Alzheimer’s disease (AD) transgenic mice by enhancing endogenous synaptic connectivity. However, this approach has no effect on the underlying beta-amyloid (Aβ) and neurofibrillary tangle pathology. Long term efficacy of cell based approaches may therefore require combinatorial approaches. This study genetically-modified NSCs to stably express and secrete the Aβ-degrading enzyme, neprilysin (sNEP). To determine whether sNEP-expressing NSCs can also modulate AD-pathogenesis in vivo, control-modified and sNEP-NSCs were transplanted unilaterally into the hippocampus of two independent and well characterized transgenic models of AD: 3xTg-AD and Thy1-APP mice. After three months, stem cell engraftment, neprilysin expression, and AD pathology were examined. Results reveal that stem cell-mediated delivery of NEP provides marked and significant reductions in Aβ pathology and increases synaptic density in both 3xTg-AD and Thy1-APP transgenic mice. Remarkably, Aβ plaque loads are reduced not only in the hippocampus and subiculum adjacent to engrafted NSCs, but also within the amygdala and medial septum, areas that receive afferent projections from the engrafted region. This data suggest that genetically-modified NSCs could provide a powerful combinatorial approach to not only enhance synaptic plasticity but to also target and modify underlying Alzheimer’s disease pathology.