gamma-Secretase is responsible for the final cut of the amyloid beta-peptide (Abeta) precursor (APP) to produce the Abeta peptide implicated the pathogenesis of Alzheimer's disease (AD). Thus, this protease is a top target for the development of AD therapeutics. gamma-Secretase is a complex of four different integral membrane proteins, with the multi-pass presenilin being the catalytic component of a novel intramembrane-cleaving aspartyl protease. gamma-Secretase cleaves other substrates besides APP, the most notorious being the Notch receptor that is required for many cell differentiation events. Because proteolysis of Notch by gamma-secretase is essential for Notch signaling, interference with this process by gamma-secretase inhibitors can cause severe toxicities. Thus, the potential of gamma-secretase as therapeutic target likely depends on the ability to selectively inhibit Abeta production without hindering Notch proteolysis. The discovery of compounds capable of such allosteric modulation of the protease activity has revived gamma-secretase as an attractive target. Structural modification of these gamma-secretase modulators through medicinal chemistry should lead to in vivo active agents suitable for clinical trials.