The gamma-secretase complex catalyzes intramembrane proteolysis of a number of 
transmembrane proteins, including amyloid precursor protein, Notch, ErbB4, and 
E-cadherin. gamma-Secretase is known to contain four major protein constituents: 
presenilin (PS), nicastrin, Aph-1, and Pen-2, all of which are integral membrane 
proteins. There is increasing evidence that the formation of the complex and the 
stability of the individual components are tightly controlled in the cell, 
assuring correct composition of functional complexes. In this report, we 
investigate the topology, localization, and mechanism for destabilization of 
Pen-2 in relation to PS function. We show that PS1 regulates the subcellular 
localization of Pen-2: in the absence of PS, Pen-2 is sequestered in the 
endoplasmic reticulum (ER) and not transported to post-ER compartments, where 
the mature gamma-secretase complexes reside. PS deficiency also leads to 
destabilization of Pen-2, which is alleviated by proteasome inhibitors. In 
keeping with this, we show that Pen-2, which adopts a hairpin structure with the 
N and C termini facing the luminal space, is ubiquitylated prior to degradation 
and presumably retrotranslocated from the ER to the cytoplasm. Collectively, our 
data suggest that failure to become incorporated into the gamma-secretase 
complex leads to degradation of Pen-2 through the ER-associated 
degradation-proteasome pathway.