AbstractMutations in the amyloid precursor protein (APP) gene and the aberrant cleavage of APP by γ-secretase are associated with Alzheimer’s disease (AD). Here we have developed a simple and sensitive cell-based assay to detect APP cleavage by γ-secretase. Unexpectedly, most familial AD (FAD)-linked APP mutations make APP partially resistant to γ-secretase. Mutations that alter residues N terminal to the γ-secretase cleavage site Aβ42 have subtle effects on cleavage efficiency and cleavage-site selectivity. In contrast, mutations that alter residues C terminal to the Aβ42 site reduce cleavage efficiency and dramatically shift cleavage-site specificity toward the aggregation-prone Aβ42. Moreover, mutations that remove positive charge at residue 53 greatly reduce the APP cleavage by γ-secretase. These results suggest a model of γ-secretase substrate recognition, in which the APP region C terminal to the Aβ42 site and the positively charged residue at position 53 are the primary determinants for substrate binding and cleavage-site selectivity. We further demonstrate that this model can be extended to γ-secretase processing of notch receptors, a family of highly conserved cell-surface signaling proteins.