The presenilin C-terminus is required for ER-retention, nicastrin-binding and gamma-secretase activity.

gamma-Secretase is an intramembrane cleaving protease involved in Alzheimer's disease. gamma-Secretase occurs as a high molecular weight complex composed of presenilin (PS1/2), nicastrin (NCT), anterior pharynx-defective phenotype 1 and PS enhancer 2. Little is known about the cellular mechanisms of gamma-secretase assembly. Here we demonstrate that the cytoplasmic tail of PS1 fulfills several functions required for complex formation, retention of unincorporated PS1 and gamma-secretase activity. The very C-terminus interacts with the transmembrane domain of NCT and may penetrate into the membrane. Deletion of the last amino acid is sufficient to completely block gamma-secretase assembly and release of PS1 from the endoplasmic reticulum (ER). This suggests that unincorporated PS1 is actively retained within the ER. We identified a hydrophobic stretch of amino acids within the cytoplasmic tail of PS1 distinct from the NCT-binding site, which is required to retain unincorporated PS1 within the ER. Deletion of the retention signal results in the release of PS1 from the ER and the assembly of a nonfunctional gamma-secretase complex, suggesting that at least a part of the retention motif may also be required for the function of PS1.