Cleavage of the beta-secretase processed beta-amyloid precursor protein by 
gamma-secretase leads to the extracellular release of Abeta42, the more 
amyloidogenic form of the beta-amyloid peptide, which subsequently forms the 
amyloid-plaques diagnostic of Alzheimer's disease. Mutations in beta-amyloid 
precursor protein (APP), presenilin-1 and presenilin-2 associated with familial 
Alzheimer's disease (FAD) increase release of Abeta42, suggesting that FAD may 
directly result from increased gamma-secretase activity. Here, we show that 
familial Alzheimer's disease mutations clustered near the sites of 
gamma-secretase cleavage actually decrease gamma-secretase-mediated release of 
the intracellular fragment of APP (CTFgamma). Concordantly, presenilin-1 
mutations that result in Alzheimer's disease also decrease the release of 
CTFgamma. Mutagenesis of the epsilon cleavage site in APP mimicked the effects 
of the FAD mutations, both decreasing CTFgamma release and increasing Abeta42 
production, suggesting that perturbation of this site may account for the 
observed decrement in gamma-secretase-mediated proteolysis of APP. As CTFgamma 
has been implicated in transcriptional activation, these data indicate that 
decreased signaling and transcriptional regulation resulting from FAD mutations 
in beta-amyloid precursor protein and presenilin-1 may contribute to the 
pathology of Alzheimer's disease.