Mutations in genes encoding presenilins (PS1 and PS2) cosegregate with the majority of early onset cases of familial Alzheimer's disease. PS1 and PS2 are polytopic membrane proteins that undergo endoproteolytic cleavage to generate stable NH2- and COOH-terminal derivatives (NTF and CTF, respectively). Several lines of evidence suggest that the endoproteolytic derivatives are likely the functional units of PS in vivo. In the present report, we examine the disposition of PS NTF and CTF assemblies in stable mouse N2a neuroblastoma cell lines expressing human PS polypeptides. We show that exogenous expression of PS1 NTFs neither assemble with endogenous CTF nor exhibit dominant negative inhibitory effects on the endogenous PS1 cleavage and the accumulation of derivatives. In cells co-expressing PS1 and PS2, PS1- and PS2-derived fragments do not form mixed assemblies. In contrast, cells expressing a chimeric PS1/PS2 polypeptide form stable PS1 NTF-PS2 CTF assemblies. Moreover, expression of chimeric PS1/PS2 polypeptides harboring a familial early onset AD-linked mutation (M146L) elevates the production of Abeta42 peptides. Our results provide evidence that assembly of structural domains contained within NH2- and COOH-terminal regions of PS occur prior to endoproteolytic cleavage.