A quantitative structure-activity relationship (QSAR) and molecular modeling study has been made on a series of hydroxyethylamine (HEA) derivatives acting as Beta-secretase inhibitors to find the physicochemical properties of the compounds governing their activity and nature of their interactions with the receptor. From this study it has been found that all three activities of HEA derivatives, i.e., enzyme inhibition, cell inhibition, and Cat-D inhibition activities, are primarily controlled by the molar refractivity of the compounds and that they have strong hydrogen bond interactions with the receptors. Using these results some new prospective compounds possessing higher potencies are predicted. The docking studies are performed on these compounds to see their mode of interaction with the receptor.