Mutations of presenilin 1 (PS1) causing Alzheimer's disease selectively increase 
the secretion of the amyloidogenic betaA4(1-42), whereas knocking out the gene 
results in decreased production of both betaA4(1-40) and (1-42) amyloid peptides 
(De Strooper et al. 1998). Therefore, PS1 function is closely linked to the 
gamma-secretase processing of the amyloid precursor protein (APP). Given the 
ongoing controversy on the subcellular localization of PS1, it remains unclear 
at what level of the secretory and endocytic pathways PS1 exerts its activity on 
APP and on the APP carboxy-terminal fragments that are the direct substrates for 
gamma-secretase. Therefore, we have reinvestigated the subcellular localization 
of endogenously expressed PS1 in neurons in vitro and in vivo using confocal 
microscopy and fine-tuned subcellular fractionation. We show that uncleaved PS1 
holoprotein is recovered in the nuclear envelope fraction, whereas the cleaved 
PS fragments are found mainly in post-ER membranes including the intermediate 
compartment (IC). PS1 is concentrated in discrete sec23p- and 
p58/ERGIC-53-positive patches, suggesting its localization in subdomains 
involved in ER export. PS1 is not found to significant amounts beyond the 
cis-Golgi. Surprisingly, we found that APP carboxy-terminal fragments also 
coenrich in the pre-Golgi membrane fractions, consistent with the idea that 
these fragments are the real substrates for gamma-secretase. Functional evidence 
that PS1 exerts its effects on gamma-secretase processing of APP in the ER/IC 
was obtained using a series of APP trafficking mutants. These mutants were 
investigated in hippocampal neurons derived from transgenic mice expressing 
PS1wt or PS1 containing clinical mutations (PS1(M146L) and PS1(L286V)) at 
physiologically relevant levels. We demonstrate that the APP-London and PS1 
mutations have additive effects on the increased secretion of betaA4(1-42) 
relative to betaA4(1-40), indicating that both mutations operate independently. 
Overall, our data clearly establish that PS1 controls gamma(42)-secretase 
activity in pre-Golgi compartments. We discuss models that reconcile this 
conclusion with the effects of PS1 deficiency on the generation of betaA4(1-40) 
peptide in the late biosynthetic and endocytic pathways.