Presenilins (PS) are involved in gamma-secretase-mediated processing of beta-amyloid precursor protein (APP) and the Notch family of proteins. In addition, presenilin 1 (PS-1) binds to members of the armadillo family of proteins. In this study the relationship between PS-1-mediated proteolytic activity and PS-1-mediated regulation of beta-catenin function was investigated. Incubation of cells with a potent, small molecule gamma-secretase inhibitor did not affect PS-1/beta-catenin interaction as determined by co-immunoprecipitation, or affect the regulation of beta-catenin turnover, as determined by pulse-chase analysis, even at inhibitor concentrations that completely blocked PS-mediated APP processing. Moreover, inhibition of PS-1-mediated proteolytic activity did not affect beta-catenin trafficking, as determined by immunolocalization and immunoblotting, or beta-catenin-mediated transcription. These results indicate that PS-1-mediated regulation of gamma-secretase activity and PS-1-mediated regulation of beta-catenin function can be pharmacologically separated and support the idea that these are distinct functions.