ABSTRACT Mutations in Presenilin-1 (PSP) are a major cause of familial Alzheimer’s disease. Our previous studies showed that PS1 is required for murine neural development. Here we report that lack of PS1 leads to premature differentiation of neural progenitor cells, indicating a role for PS1 in a cell fate decision between postmitotic neurons and neural progenitor cells. Neural proliferation and apoptotic cell death during neurogenesis are unaltered in PS1−/− mice, suggesting that the reduction in the neural progenitor cells observed in the PS1−/− brain is due to premature differentiation of progenitor cells, rather than to increased apoptotic cell death or decreased cell proliferation. In addition, the premature neuronal differentiation in the PS1−/− brain is associated with aberrant neuronal migration and disorganization of the laminar architecture of the developing cerebral hemisphere. In the ventricular zone of PS1−/− mice, expression of the Notch1 downstream effector gene Hes5 is reduced and expression of the Notch1 ligand Dll1 is elevated, whereas expression of Notch1 is unchanged. The level of Dll1 transcripts is also increased in the presomitic mesoderm of PS1−/− embryos, while the level of Notch1 transcripts is unchanged, in contrast to a previous report (Wong et al., 1997, Nature 387, 288-292). These results provide direct evidence that PS1 controls neuronal differentiation in association with the downregulation of Notch signalling during neurogenesis.