Cerebral deposition of amyloid beta-protein (A beta) is believed to play a key role in the pathogenesis of Alzheimer's disease. Because A beta is produced from the processing of amyloid beta-protein precursor (APP) by beta- and gamma-secretases, these enzymes are considered important therapeutic targets for identification of drugs to treat Alzheimer's disease. Unlike beta-secretase, which is a monomeric aspartyl protease, gamma-secretase activity resides as part of a membrane-bound, high molecular weight, macromolecular complex. Pepstatin and L685458 are among several structural classes of gamma-secretase inhibitors identified so far. These compounds possess a hydroxyethylene dipeptide isostere of aspartyl protease transition state analogs, suggesting gamma-secretase may be an aspartyl protease. However, the mechanism of inhibition of gamma-secretase by pepstatin and L685458 has not been elucidated. In this study, we report that pepstatin A methylester and L685458 unexpectedly displayed linear non-competitive inhibition of gamma-secretase. Sulfonamides and benzodiazepines, which do not resemble transition state analogs of aspartyl proteases, also displayed potent, non-competitive inhibition of gamma-secretase. Models to rationalize how transition state analogs inhibit their targets by non-competitive inhibition are discussed.