Aberrant cleavage of amyloid precursor protein (APP) by γ-secretase contributes to the development of Alzheimer's disease. More than 200 disease-derived mutations have been identified in presenilin (the catalytic subunit of γ-secretase), making modulation of γ-secretase activity a potentially attractive therapeutic opportunity. Unfortunately, the technical challenges in dealing with intact γ-secretase have hindered discovery of modulators and demand a convenient substitute approach. Here we report that, similar to γ-secretase, the archaeal presenilin homolog PSH faithfully processes the substrate APP C99 into Aβ42, Aβ40, and Aβ38. The molar ratio of the cleavage products Aβ42 over Aβ40 by PSH is nearly identical to that by γ-secretase. The proteolytic activity of PSH is specifically suppressed by presenilin-specific inhibitors. Known modulators of γ-secretase also modulate PSH similarly in terms of the Aβ42/Aβ40 ratio. Structural analysis reveals association of a known γ-secretase inhibitor with PSH between its two catalytic aspartate residues. These findings identify PSH as a surrogate protease for the screening of agents that may regulate the protease activity and the cleavage preference of γ-secretase.A myloid precursor protein (APP) is initially cleaved by β-secretase in the extracellular space, producing a membrane-tethered, 99-residue carboxyl-terminal fragment known as APP C99 (1). APP C99 then undergoes sequential cleavages by γ-secretase, first at the e sites, yielding Aβ49/Aβ48, and eventually at the γ-sites, generating Aβ42/Aβ40/Aβ38 (2-4) (Fig. 1A). The 230-kDa γ-secretase contains four components: presenilin (PS), Pen-2, Aph-1, and nicastrin (NCT), of which PS1 is the target of most mutations derived from early-onset familial Alzheimer's disease (FAD) patients. Rather than abolishing the protease activity of γ-secretase, these mutations are thought to increase the molar ratio of Aβ42 over Aβ40 (2).Among the cleavage products of γ-secretase, Aβ42 is particularly prone to aggregation, leading to formation of β-amyloid plaque in the brain and presumably causing Alzheimer's disease (3). Other FAD-derived mutations map to APP and PS2, lending support to the causal relationship between formation of β-amyloid plaque and Alzheimer's disease (5). Therapeutic intervention of Alzheimer's disease may directly benefit from in vitro investigation of γ-secretase and discovery of its potential modulators (6). Unfortunately, such effort has been hampered by the difficulty in expression, purification, and manipulation of the complex protease. This problem persists despite recent breakthroughs in structural elucidation of γ-secretase and nicastrin (7,8).The intramembrane aspartate protease PSH from the archaeon Methanoculleus marisnigri JR1 shares 19% sequence identity and 53% sequence similarity with human PS1 (hPS1). The signature motifs for catalysis, ΦYDΦΦ (Φ for a hydrophobic residue) on transmembrane segment 6 (TM6) and ΦGΦGD on TM7, are identical between PSH and hPS1. PSH can be readily overexpressed in Escheri...