Several lines of evidence implicate lipid raft microdomains inAlzheimer disease-associated -amyloid peptide (A) production. Notably, targeting -secretase (-site amyloid precursor protein (APP)-cleaving enzyme 1 (BACE1)) exclusively to lipid rafts by the addition of a glycosylphosphatidylinositol (GPI) anchor to its ectodomain has been reported to elevate A secretion. Paradoxically, A secretion is not reduced by the expression of non-raft resident S-palmitoylation-deficient BACE1 (BACE1-4C/A (C474A/C478A/C482A/C485A)). We addressed this apparent discrepancy in raft microdomain-associated BACE1 processing of APP in this study. As previously reported, we found that expression of BACE1-GPI elevated A secretion as compared with wild-type BACE1 (WTBACE1) or BACE1-4C/A. However, this increase occurred without any difference in the levels of APP ectodomain released following BACE1 cleavage (soluble APP), arguing against an overall increase in BACE1 processing of APP per se. Further analysis revealed that WTBACE1 cleaves APP at -and -sites, generating ؉1 and ؉11 -C-terminal fragments and secreting intact as well as N-terminally truncated A. In contrast, three different BACE1-GPI chimeras preferentially cleaved APP at the -site, mainly generating ؉1 -C-terminal fragment and secreting intact A. As a consequence, cells expressing BACE1-GPI secreted relatively higher levels of intact A without an increase in BACE1 processing of APP. Markedly reduced cleavage at -site exhibited by BACE1-GPI was cell type-independent and insensitive to subcellular localization of APP or the pathogenic KM/NL mutant. We conclude that the apparent elevation in A secretion by BACE1-GPI is mainly attributed to preferential cleavage at the -site and failure to detect ؉11 A species secreted by cells expressing WTBACE1.