The drug, verubecestat, is one of a number being trialled by pharmaceutical companies in a race for the first treatment that can halt or reverse the disease.
Results from a small Phase 1 study confirm that verubecestat can reduce levels of beta-amyloid, a protein fragment that accumulates in sticky deposits or "plaques" in the brains of Alzheimer's sufferers.
Most importantly, it appeared to produce no severe side effects.
Earlier experiments with drugs that work the same way, by targeting an enzyme linked to beta-amyloid build-up, were abandoned when they were found to cause liver and nerve damage.
Publication of the trial findings comes as two much larger international trials testing the effectiveness of verubecestat in more than 3,000 patients nears completion.
Verubecestat, made by drug giants Merck, is not alone.
Two other medicines with the potential to modify Alzheimer's progression, solanezumab and aducanumab, are also undergoing Phase III trials.
However, both differ from the Merck drug in that they are antibodies designed to mount an immunological-style attack on beta-amyloid.
Dr Rosa Sancho, from the charity Alzheimer's Research UK, said: "It has been over a decade since a new drug was licensed for the treatment of dementia, so we urgently need new medicines that can provide real benefit for people living with dementia.
"There is a wave of potential new treatments currently being tested for dementia, with the results of these studies hotly anticipated over the course of the coming months and years.
"In this small Phase I clinical trial, verubecestat was able to reduce the levels of a key Alzheimer's protein, but it remains to be seen whether this translates into slower memory decline for people with the disease."
A history of past failures mean that scientists tread carefully when announcing apparently promising results from early studies of new Alzheimer's treatments.
Currently there are medicines available that can alleviate some of the symptoms of the disease, but nothing capable of halting or slowing its progress.
That situation may be about to change if drugs such as verubecestat pass the stiff tests of safety and effectiveness imposed by medicine regulators.
The Phase I trial reported in the journal Science Translational Medicine recruited just 32 patients and was chiefly concerned with dosage and safety.
Participants had mild or moderate Alzheimer's disease but were otherwise healthy.
The study, led by Dr Matthew Kennedy, from Merck's US research laboratories in New Jersey, looked for markers of beta-amyloid in cerebrospinal fluid.
It showed that single and multiple doses of verubecestat could lower levels of the harmful peptide without serious side effects.
Other research by the same team found that a single dose of the drug markedly reduced levels of beta-amyloid in rats and monkeys. The animals showed no sign of toxicity even after extended treatment.
Verubecestat is known as a BACE1 inhibitor. It targets an enzyme called beta-secretase 1 that slices up a precursor protein to produce beta-amyloid fragments.
Dr Sancho added: "As verubecestat works differently to other drugs currently being tested for Alzheimer's, if it proves successful, it could be an important weapon in the arsenal for doctors treating the disease in future.
"Alzheimer's is a complex and devastating disease and so a multi-pronged approach may give us the best chance of tackling it in the coming years. As the first BACE1 inhibitor to reach the final stages of testing in people, the ultimate test will be whether these ongoing trials show verubecestat can provide tangible benefits for people with Alzheimer's.
"Scientists have reflected on past lessons in Alzheimer's drug development and it is promising to see an increasing number of drugs now entering Phase III clinical testing in the disease, giving us renewed hope in the hunt for new treatments."