Presenilins are needed for proteolytic processing of transmembrane proteins of the Notch/Lin-12 family and for cleavage of the amyloid precursor protein. Accumulating evidence now strongly implicates Presenilin as the catalytic core of a multiprotein complex that executes an unusual intramembranous cleavage of its substrates. In the case of amyloid precursor protein, this cleavage contributes to the generation of small, toxic amyloid peptides that trigger the pathological development of Alzheimer's disease. In the Notch/Lin-12 pathway, Presenilin-mediated cleavage of the receptor is a crucial feature of ligand-induced receptor activation and signal transduction. In this pathway, the Presenilins perform a regulated cleavage event that follows additional processing steps during receptor maturation and ligand-induced ectodomain removal.