Proteolytic cleavage of amyloid precursor protein by beta-secretase (BACE-1) and gamma-secretase leads to formation of beta-amyloid (A beta) a key component of amyloid plaques, which are considered the hallmark of Alzheimer's disease. Small molecule inhibitors of BACE-1 may reduce levels of A beta and thus have therapeutic potential for treating Alzheimer's disease. We recently reported the identification of a novel small molecule BACE-1 inhibitor N-[2-(2,5-diphenyl-pyrrol-1-yl)-acetyl]guanidine (3.a.1). We report here the initial hit-to-lead optimization of this hit and the SAR around the aryl groups occupying the S(1) and S(2') pockets leading to submicromolar BACE-1 inhibitors.