Mutations in the presenilin 1 (PS1) and presenilin 2 (PS2) genes are associated with early-onset autosomal dominant familial Alzheimer's disease, and the gene products are endoproteolytically processed to yield N-terminal fragments (NTF) and C-terminal fragments (CTF). We have studied the cleavage site of the PS2 protein in stably transfected human neuroblastoma cells. The 23 kD PS2-CTF was isolated by a combination of anion exchange chromatography and affinity chromatography and directly sequenced. The N-terminus of the PS2-CTF started at residue 307, which indicated that the cleavage occurs between Lys306 and Leu307 in the proximal portion of the large hydrophilic loop. This site is close to the cleavage positions observed in the PS1 protein.