Cerebral accumulation of the amyloid beta-protein (Abeta) is an early and invariant event in the pathogenesis of Alzheimer's disease (AD). Mutations in the presenilin (PS) 1 and 2 genes that increase production of the highly amyloidogenic Abeta(42) are the most common cause of familial AD. Deletion of PS1 in mice reduces Abeta generation, indicating that PS1 mediates the last step in the generation of Abeta from beta-amyloid precursor protein (APP) by the unidentified gamma-secretase. Mutating either of two conserved transmembrane aspartates in PS1 significantly reduced Abeta production and increased the APP C-terminal fragments that are gamma-secretase substrates. These results indicate that PS1 is either a unique diaspartyl cofactor for gamma-secretase or is itself gamma-secretase. Furthermore, studies on the gamma-secretase-like proteolytic processing of Notch and Ire1 suggest a common mechanism for the involvement of PS1 in intramembrane proteolysis of membrane proteins.