Gamma-secretase cleavage is the final proteolytic step that releases the amyloid beta-peptide (Abeta) from the amyloid beta-protein precursor (APP). Significant evidence indicates that the presenilins (PS) are catalytic components of a high molecular weight gamma-secretase complex. The glycoprotein nicastrin was recently identified as a functional unit of this complex based on 1) binding to PS and 2) the ability to modulate Abeta production following mutation of a conserved DYIGS region. In contrast to the initial report, we find that overexpression of wild-type (WT) nicastrin increases Abeta production, whereas DYIGS mutations (MT) have little or no effect. The increase in Abeta production is associated with an increase in gamma-secretase activity but not with a detectable increase in PS1 levels. Subcellular fractionation studies show that WT but not MT nicastrin matures into buoyant membrane fractions enriched in gamma-secretase activity. These data support the hypothesis that nicastrin is an essential component of the gamma-secretase complex. The finding that WT nicastrin overexpression can increase gamma-secretase activity without altering levels of the presumed catalytic component (PS) of the enzyme may point to a role for nicastrin in facilitating cleavage by regulating substrate interactions with the gamma-secretase complex.