According to the beta-amyloid (Abeta) hypothesis, compounds that inhibit gamma-secretase, the pivotal enzyme that generates Abeta, are potential therapeutics for Alzheimer's disease (AD). Studies in both transgenic and non-transgenic animal models of AD have indicated that gamma-secretase inhibitors, administered by the oral route, are able to lower brain Abeta concentrations. However, scanty data are available on the effects of these compounds on brain Abeta deposition after prolonged administration. Behavioral studies are also scarce with only one study indicating positive cognitive effects of a peptidomimetic compound (DAPT). Gamma-secretase inhibitors may cause abnormalities in the gastrointestinal tract, thymus and spleen in rodents. These toxic effects are likely due to inhibition of Notch cleavage, a transmembrane receptor involved in regulating cell-fate decisions. Interestingly, some non-steroidal anti-inflammatory drugs (NSAIDs) and other small organic molecules have been found to modulate gamma-secretase and to selectively reduce beta-amyloid(1-42) (Abeta42) levels without affecting Notch cleavage. Long-term histopathological and behavioral animal studies are available with these NSAIDs (mainly ibuprofen) but it is unclear if the observed in vivo effects on Abeta brain pathology and learning depend on their activity on gamma-secretase or on other biological targets. The first published clinical studies in healthy subjects and in AD patients with a gamma-secretase inhibitor, LY-450139, confirmed the dose-dependent inhibition of plasma Abeta but evidenced a later rebound in Abeta plasma levels and absence of a significant effect on cerebrospinal fluid Abeta concentrations. Some observed gastrointestinal adverse events have raised concerns. Clinical studies with other potent gamma-secretase inhibitors will tell us if these pharmacodynamic and tolerability profiles observed in humans are typical of the pharmacological class or are compound-specific. Given the uncertain Abeta reduction target and the potential for mechanism-based toxicity, it has been suggested that biomarkers for efficacy (cerebrospinal fluid Abeta42 levels) and toxicity (plasma adipsin levels) would be helpful in initial clinical trials with gamma-secretase inhibitors. A large ongoing Phase 3 study with (R)-flurbiprofen, a claimed selective Abeta42 lowering agent, will tell us if allosteric modulation of gamma-secretase is clinically effective.