The hippocampus is heavily affected by progressive neurodegeneration and β-amyloid pathology in Alzheimer's disease (AD). The hippocampus is also one of the few brain regions that generate new neurons throughout adulthood. Because hippocampal neurogenesis is regulated by both endogenous and environmental factors, we determined whether it benefits from therapeutic reduction of β-amyloid peptide (Aβ)-related toxicity induced by passive Aβ immunotherapy. Aβ immunotherapy of 8–9-month-old mice expressing familial AD-causing mutations in the amyloid precursor protein and presenilin-1 genes with an antibody against Aβ decreased compact β-amyloid plaque burden and promoted survival of newly born neurons in the hippocampal dentate gyrus. As these neurons matured, they exhibited longer dendrites with more complex arborization compared with newly born neurons in control-treated transgenic littermates. The newly born neurons showed signs of functional integration indicated by expression of the immediate-early gene Zif268 in response to exposure to a novel object. Aβ immunotherapy was associated with higher numbers of synaptophysin-positive synaptic boutons. Labeling dividing progenitor cells with a retroviral vector encoding green fluorescent protein (GFP) showed that Aβ immunotherapy restored the impaired dendritic branching, as well as the density of dendritic spines in new mature neurons. The presence of cellular prion protein (PrP^c) on the dendrites of the GFP⁺ newly born neurons is compatible with a putative role of PrP^c in mediating Aβ-related toxicity in these cells. In addition, passive Aβ immunotherapy was accompanied by increased angiogenesis. Our data establish that passive Aβ immunotherapy can restore the morphological maturation of the newly formed neurons in the adult hippocampus and promote angiogenesis. These findings provide evidence for a role of Aβ immunotherapy in stimulating neurogenesis and angiogenesis in transgenic mouse models of AD, and they suggest the possibility that Aβ immunotherapy can recover neuronal and vascular functions in brains with β-amyloidosis.