Generation of A beta from the beta-amyloid precursor protein (APP) requires a series of proteolytic processes, including an intramembranous cleavage catalyzed by an aspartyl protease, gamma-secretase. Two aspartates in presenilins (PS) are required for gamma-secretase activity (D257 and D385 of PS1), suggesting that PS may be part of this protease. Little is known concerning the importance of other sequences in PS for activity. We introduced point mutations (P433L, A434D, L435R) into a completely conserved region C-terminal to transmembrane domain eight of PS1. The P433L mutation abolished PS1 endoproteolysis as well as gamma-secretase cleavage of APP and Notch in PS1/2 K/O cells. In HEK cells, expression of PS1/P433L reduced A beta production and caused accumulation of APP C-terminal stubs. When the P433L mutation was introduced into the non-cleavable Delta exon 9 (Delta E9) variant of PS1, it abolished gamma-secretase cleavage of APP and Notch. The P433L holoprotein is stable and incorporated into the high molecular weight gamma-secretase complex, arguing that P433 is not necessary for formation or stabilization of the gamma-secretase complex. Other non-conservative mutations in the invariant P(433)A(434)L(435) sequence also result in a phenotype that is indistinguishable from the aspartate mutants, suggesting a direct involvement of this sequence in gamma-secretase activity.