Alzheimer's disease is characterized by accumulation of toxic beta-amyloid (Abeta) in the brain and neuronal death. Several mutations in presenilin (PS1) and beta-amyloid precursor protein (APP) associate with an increased Abeta(42/40) ratio. Abeta(42), a highly fibrillogenic species, is believed to drive Abeta aggregation. Factors shifting gamma-secretase cleavage of APP to produce Abeta(42) are unclear. We investigate the molecular mechanism underlying altered Abeta(42/40) ratios associated with APP mutations at codon 716 and 717. Using FRET-based fluorescence lifetime imaging to monitor APP-PS1 interactions, we show that I716F and V717I APP mutations increase the proportion of interacting molecules earlier in the secretory pathway, resulting in an increase in Abeta generation. A PS1 conformation assay reveals that, in the presence of mutant APP, PS1 adopts a conformation reminiscent of FAD-associated PS1 mutations, thus influencing APP binding to PS1/gamma-secretase. Mutant APP affects both intracellular location and efficiency of APP-PS1 interactions, thereby changing the Abeta(42/40) ratio.