The amyloid precursor protein (APP) intracellular domain (AICD) is implicated in the pathogenesis of Alzheimer’s disease (AD), but post-translational modification of AICD has rarely been studied and its role in AD is unknown. In this study, we examined the role and molecular mechanism of AICD SUMOylation in the pathogenesis of AD. We found that AICD is SUMO-modified by the SUMO E3 ligase protein inhibitor of activated STAT1 (PIAS1) in the hippocampus at Lys-43 predominantly, and that knockdown of PIAS1 decreases endogenous AICD SUMOylation. AICD SUMOylation increases AICD association with its binding protein Fe65 and increases AICD nuclear translocation. Furthermore, AICD SUMOylation increases AICD association with cyclic AMP-responsive element binding protein (CREB) and p65 and their DNA binding for transcriptional activation of neprilysin (NEP) and transthyretin (TTR), two major Aβ-degrading enzymes, respectively. Consequently, AICD SUMOylation decreases the Aβ level, Aβ oligomerization, and amyloid plaque deposits. It also rescues spatial memory deficits in APP/PS1 mice. Conversely, blockade of AICD SUMOylation at Lys-43 produces the opposite effects. Melatonin is identified as an endogenous stimulus that induces AICD SUMOylation. It also decreases the Aβ level and rescues reduction of PIAS1, NEP, and TTR expression in APP/PS1 mice. In this study, we demonstrate that AICD SUMOylation functions as a novel endogenous defense mechanism to combat AD.