Soluble amyloid precursor protein-alpha (sAPPα) is a regulator of neuronal and memory mechanisms, while also having neurogenic and neuroprotective effects in the brain. As adult hippocampal neurogenesis is impaired in Alzheimer’s disease, we tested the hypothesis that sAPPα delivery would rescue adult hippocampal neurogenesis in an APP/PS1 mouse model of Alzheimer’s disease. An adeno-associated virus-9 (AAV9) encoding murine sAPPα was injected into the hippocampus of 8 month-old wild-type and APP/PS1 mice, and later two different thymidine analogues (XdU) were systemically injected to label adult-born cells at different time points after viral transduction. The proliferation of adult-born cells, cell survival after eight weeks, and cell differentiation into either neurons or astrocytes was studied. Proliferation was impaired in APP/PS1 mice but was restored to wild-type levels by viral expression of sAPPα. In contrast, sAPPα overexpression failed to rescue the survival of XdU+-labelled cells that was impaired in APP/PS1 mice, although it did cause a significant increase in the area density of astrocytes in the granule cell layer across both genotypes. Finally, viral expression of sAPPα reduced amyloid-beta plaque load in APP/PS1 mice in the dentate gyrus and somatosensory cortex. These data add further evidence that increased levels of sAPPα could be therapeutic for the cognitive decline in AD, in part through restoration of the proliferation of neural progenitor cells in adults.