The amyloid‐β protein (Aβ), strongly implicated in the etiology of Alzheimer's disease (AD), is formed from the amyloid‐β precursor protein (APP) through sequential proteolysis by β‐ and γ‐secretases. Cleavage by γ‐secretase takes place within the middle of the single transmembrane region of APP and results primarily in 40‐ and 42‐amino acid Aβ C‐terminal variants, Aβ40 and Aβ42. The latter form of Aβ is highly fibrillogenic, is invariably elevated in autosomal‐dominant forms of AD, and is the major Aβ component found presymptomatically in cerebral deposits. Thus, blocking production of Aβ in general and Aβ42 in particular is considered an important therapeutic goal. We have developed transition‐state analogue inhibitors of γ‐secretase as molecular probes for characterizing the active site of this enzyme, as pharmacological tools for understanding its role in biology, and as affinity labels toward its definitive identification. Specifically, we found that: (1) difluoro ketone and difluoro alcohol peptidomimetics are effective inhibitors of γ‐secretase activity in APP‐transfected cells, strongly suggesting an aspartyl protease mechanism; (2) γ‐secretases that form Aβ40 and Aβ42 are pharmacologically distinct but are nevertheless closely similar; (3) large hydrophobic P1 substituents increase the inhibitory potency of these peptidomimetics, suggesting a large complementary S1 pocket for γ‐secretases; (4) Aβ42 production is increased several fold over control by these γ‐secretase inhibitors after replacement with inhibitor‐free media; (5) a bromoacetamide derivative of one of these analogues continues to inhibit total Aβ and Aβ42 production hours after replacement with compound‐free media and should help identify the target(s) of these protease transition‐state mimics.