gamma- Secretase facilitates the regulated intramembrane proteolysis of select type I membrane proteins that play diverse physiological roles in multiple cell types and tissue. In this study, we used biochemical approaches to examine the distribution of amyloid precursor protein ( APP) and several additional gamma- secretase substrates in membrane microdomains. We report that APP C- terminal fragments ( CTFs) and gamma- secretase reside in Lubrol WX detergent- insoluble membranes ( DIM) of cultured cells and adult mouse brain. APP CTFs that accumulate in cells lacking gamma- secretase activity preferentially associate with DIM. Cholesterol depletion and magnetic immunoisolation studies indicate recruitment of APP CTFs into cholesterol- and sphingolipid- rich lipid rafts, and co- residence of APP CTFs, PS1, and syntaxin 6 in DIM patches derived from the trans- Golgi network. Photoaffinity cross- linking studies provided evidence for the preponderance of active gamma- secretase in lipid rafts of cultured cells and adult brain. Remarkably, unlike the case of APP, CTFs derived from Notch1, Jagged2, deleted in colorectal cancer ( DCC), and N- cadherin remain largely detergent- soluble, indicative of their spatial segregation in non- raft domains. In embryonic brain, the majority of PS1 and nicastrin is present in Lubrol WXsoluble membranes, wherein the CTFs derived from APP, Notch1, DCC, and N- cadherin also reside. We suggest that gamma- secretase residence in non- raft membranes facilitates proteolysis of diverse substrates during embryonic development but that the translocation of gamma- secretase to lipid rafts in adults ensures processing of certain substrates, including APP CTFs, while limiting processing of other potential substrates.