The Notch signaling pathway, mediating short-range signals exchanged between cells, acts to properly direct differentiation during development and in the adult. As with other signaling pathways, mutations that lead to misregulation or misexpression of Notch have been directly linked to human cancer and other diseases. Work by our laboratory and others has brought a new sophistication to the understanding of the Notch signaling pathway, revealing an unexpected link to Alzheimer's disease (AD). y-Secretase, a multi-protein enzyme responsible for the generation of AB42 peptides, precipitates of which are thought to cause Alzheimer's disease, is a major therapeutic target in the search for a cure to this devastating dementia. Surprisingly, others and we established that y-secretase is also a critical component of the Notch pathway. Notch activation depends on y-secretase to release the Notch intracellular domain (NTCD), which acts as a nuclear transcription factor. It is possible, therefore, that pharmacological inhibition of y-secretase will cause unwanted collateral complications due to loss of Notch function. Here we propose to further our understanding of y-secretase mediated Notch proteolysis and its regulation, continuing the effort we initiated during the last funding period. We further propose to take advantage of a Notch allele we generated to address a major unresolved issue in Notch biology: the extent to which Notch activity depends on y-secretase in the adult vertebrate. These studies will defme the differences and similarities between Notch and APP as substrates of y-secretase, contributing to both the Notch and AD fields. Aim 1. We will test the hypothesis that intramembrane proteolysis of Notch by y-secretase is regulated by ligands through a force generating mechanism. An alternative hypothesis, that alterations in Notch oligomerization are required for Notch proteolysis, will also be tested. Aim 2. We will test genetically the generality of the hypothesis that Notch signaling in vertebrates is y-secretase-dependent. Aim 3. We will explore the mysterious process of proteolysis within a lipid bilayer. To distinguish between inhibition of AB42 production and Notch proteolysis, we propose a novel genetic approach to identify components of the 'y-secretase complex and identify specific blockers of AB42 production.