Nicastrin is an integral component of the high molecular weight presenilin complexes that control proteolytic processing of the amyloid precursor protein and Notch. We report here that nicastrin is most probably a type 1 transmembrane glycoprotein that is expressed at moderate levels in the brain and in cultured neurons. Immunofluorescence studies demonstrate that nicastrin is localized in the endoplasmic reticulum, Golgi, and a discrete population of vesicles. Glycosidase analyses reveal that endogenous nicastrin undergoes a conventional, trafficking-dependent maturation process. However, when highly expressed in transfected cells, there is a disproportionate accumulation of the endo-beta-N-acetylglucosaminidase H-sensitive, immature form, with no significant increase in the levels of the fully mature species. Immunoprecipitation revealed that presenilin-1 interacts preferentially with mature nicastrin, suggesting that correct trafficking and co-localization of the presenilin complex components are essential for activity. These findings demonstrate that trafficking and post-translational modifications of nicastrin are tightly regulated processes that accompany the assembly of the active presenilin complexes that execute gamma-secretase cleavage. These results also underscore the caveat that simple overexpression of nicastrin in transfected cells may result in the accumulation of large amounts of the immature protein, which is apparently unable to assemble into the active complexes capable of processing amyloid precursor protein and Notch.