␥-Secretase is a multisubunit membrane protein complex containing presenilin (PS1) as a catalytic subunit. Familial Alzheimer disease (FAD) mutations within PS1 were analyzed in yeast cells artificially expressing membrane-bound substrate, amyloid precursor protein, or Notch fused to Gal4 transcriptional activator. The FAD mutations, L166P and G384A (Leu-166 to Pro and Gly-384 to Ala substitution, respectively), were loss-of-function in yeast. We identified five amino acid substitutions that suppress the FAD mutations. The cleavage of amyloid precursor protein or Notch was recovered by the secondary mutations. We also found that secondary mutations alone activated the ␥-secretase activity. FAD mutants with suppressor mutations, L432M or S438P within TMD9 together with a missense mutation in the second or sixth loops, regained ␥-secretase activity when introduced into presenilin null mouse fibroblasts. Notably, the cells with suppressor mutants produced a decreased amount of A42, which is responsible for Alzheimer disease. These results indicate that the yeast system is useful to screen for mutations and chemicals that modulate ␥-secretase activity.The ␥-secretase is closely associated with familial Alzheimer disease (FAD) 2 (1). Presenilin is the catalytic subunit of ␥-secretase, which cleaves the intramembrane domain of amyloid precursor protein (APP), thus generating amyloid  (A) peptides. More than 150 missense mutations within the two isoforms (PS1 or PS2) of presenilin are identified for the disease. These mutations decrease the generation of A but increase the ratio between A42 and A40 (2-4), which contain 42 and 40 amino acid residues, respectively. The increased ratio leads to formation of senile plaques in the brains of patients and is responsible for the disease (1). ␥-Secretase modulators also alter the ratios among A species and are classified as A42-lowering or -raising compounds (5). The former could represent promising therapeutic agents for the treatment of Alzheimer disease.␥-Secretase, a member of the intramembrane-cleaving protease family, is composed of four membrane proteins as follows: presenilin (PS1 or PS2), nicastrin (NCT), Aph-1 (anterior pharynx-1), and Pen2 (6, 7). Crystal structures of the protease family members, including rhomboid, site-2 protease, and signal peptide peptidases PSH (8 -10), have a membrane-embedded chamber structure, which harbors catalytic residues accessible for water molecules. Although the crystal structure of ␥-secretase is currently unavailable, similar chamber-like structures have been observed by electron microscopy (11,12).Structural analysis, including cysteine-scanning assays, have suggested that PS1 contains nine transmembrane domains (TMD1-9) (13-15), and a hydrophilic "catalytic pore" is formed by TMD1,. The catalytic residues Asp-257 and Asp-385, within TMD6 and -7, respectively, are located in the chamber-like structure (16,17). The catalytic pore resides in the convex side of a horseshoe-like transmembrane arrangement of ␥-secretase, identi...