Presenilin 1 (PS1) is a component of the γ-secretase complex that cleaves a variety of type I membrane proteins, including the β-amyloid precursor protein (β-APP), Notch, and neuronal (N)- and epithelial (E)-cadherins. N-cadherin is an essential adhesion molecule that forms a complex with, and is cleaved by, PS1/γ-secretase and β-catenin in the plasma membrane. The purpose of this study was to determine whether calsenilin, a presenilin-interacting protein, has a functional role in PS1/γ-secretase-mediated N-cadherin ε-cleavage using Western blot analysis, RT-PCR, immunoprecipitation, subcellular fractionation, biotinylation, and a luciferase reporter assay in SH-SY5Y neuroblastoma cells. Here, we demonstrate that the expression of calsenilin leads to a disruption of PS1/γ-secretase-mediated ε-cleavage of N-cadherin, which results in the significant accumulation of N-cadherin C-terminal fragment 1 (Ncad/CTF1), the reduction of cytoplasmic Ncad/CTF2 release, and a deceleration of PS1-CTF delivery to the cell surface. Interestingly, we also found that the expression of calsenilin is associated with the redistribution of β-catenin from the cell surface to a cytoplasmic pool, as well as with the negative regulation of genes that are targets of T-cell factor/β-catenin nuclear signaling. Taken together, our findings suggest that calsenilin is a novel negative regulator of N-cadherin processing that plays an important role in β-catenin signaling.