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Abstract Background Alzheimer’s disease (AD) is the most common form of age-related neurodegenerative diseases. Cerebral deposition of Aβ peptides, especially Aβ42, is considered the major neuropathological hallmark of AD and the putative cause of AD-related neurotoxicity. Aβ peptides are produced by sequential proteolytic processing of APP, with β-secretase (BACE) being the initiating enzyme. Therefore, BACE has been considered an attractive therapeutic target in AD research and several BACE inhibitors have been tested in clinical trials, but so far, all have had negative outcomes or even led to worsening of cognitive function. AD can be triggered by Aβ years before the first symptoms appear and one reason for the failures could be that the clinical trials were initiated too late in the disease process. Another possible explanation could be that BACE inhibition alters physiological APP processing in a manner that impairs synaptic function, causing cognitive deterioration. Methods The aim of this study was to investigate if partial BACE inhibition, mimicking the putative protective effect of the Icelandic mutation in the APP gene, could reduce Aβ generation without affecting synaptic transmission. To investigate this, we used an optical electrophysiology platform, in which effects of compounds on synaptic transmission in cultured neurons can be monitored. We employed this method on primary cortical rat neuronal cultures treated with three different BACE inhibitors (BACE inhibitor IV, LY2886721, and lanabecestat) and monitored Aβ secretion into the cell media. Results We found that all three BACE inhibitors tested decreased synaptic transmission at concentrations leading to significantly reduced Aβ secretion. However, low-dose BACE inhibition, resulting in less than a 50% decrease in Aβ secretion, did not affect synaptic transmission for any of the inhibitors tested. Conclusion Our results indicate that Aβ production can be reduced by up to 50%, a level of reduction of relevance to the protective effect of the Icelandic mutation, without causing synaptic dysfunction. We therefore suggest that future clinical trials aimed at prevention of Aβ build-up in the brain should aim for a moderate CNS exposure of BACE inhibitors to avoid side effects on synaptic function.