Accumulation of amyloid-β peptides (Aβ), the proteolytic products of the amyloid precursor protein (APP), induces a variety of synaptic dysfunctions ranging from hyperactivity to depression that are thought to cause cognitive decline in Alzheimer's disease. While depression of synaptic transmission has been extensively studied, the mechanisms underlying synaptic hyperactivity remain unknown. Here, we show that Aβ40 monomers and dimers augment release probability through local fine-tuning of APP-APP interactions at excitatory hippocampal boutons. Aβ40 binds to the APP, increases the APP homodimer fraction at the plasma membrane, and promotes APP-APP interactions. The APP activation induces structural rearrangements in the APP/G_i/o-protein complex, boosting presynaptic calcium flux and vesicle release. The APP growth-factor-like domain (GFLD) mediates APP-APP conformational changes and presynaptic enhancement. Thus, the APP homodimer constitutes a presynaptic receptor that transduces signal from Aβ40 to glutamate release. Excessive APP activation may initiate a positive feedback loop, contributing to hippocampal hyperactivity in Alzheimer's disease.