Gamma-secretase cleaves the transmembrane domain of beta-amyloid precursor protein at multiple sites referred to as gamma-, epsilon-, and zeta-cleavage sites. We previously showed that N-[N-(3,5-difluorophenacetyl)-L-alanyl]-S-phenylglycine t-butyl ester (DAPT), a potent dipeptide gamma-secretase inhibitor, causes differential accumulation of longer amyloid beta-proteins (Abetas) within Chinese hamster ovary cells co-expressing beta C-terminal fragment and wild-type presenilin 1 (C99/wtPS1 cells). In this study, we used sucrose density gradient centrifugation to fractionate the membranes from C99/wtPS1 cells that had been pretreated with DAPT. We found that accumulating Abeta46 localized exclusively to low density membrane (LDM) domains. Incubating the Abeta46-accumulating LDM domains at 37 degrees C produced Abeta40, Abeta42, Abeta43, and beta-amyloid precursor protein intracellular domain. The addition of L685,458 completely prevented beta-amyloid precursor protein intracellular domain generation and resulted in a large decrease in the level of Abeta46 and the concomitant appearance of Abeta40 and Abeta43 but not Abeta42. Further addition of DAPT suppressed the production of Abeta40/43 and abolished the decrease in the amount of Abeta46. These data indicate that preaccumulated Abeta46 is processed by gamma-secretase to Abeta40/43 but not to Abeta42 in the LDM domains. The amount of newly produced Abeta40 and Abeta43 was roughly equivalent to the decrease in the amount of Abeta46. Temporal profiles did not show a maximal concentration for Abeta43, suggesting that Abeta46 is processed to Abeta40 and Abeta43 through a nonsuccessive process.