The γ-secretase complex is required for intramembrane cleavage of several integral membrane proteins, including the Notch receptor, where it generates an active signaling fragment. Four putative γ-secretase components have been identified—presenilin (Psn), nicastrin (Nct), Aph-1, and Pen-2. Here, we use a stepwise coexpression approach to investigate the role of each new component in γ-secretase assembly and activation. Coexpression of all four proteins leads to high level accumulation of mature Psn and increased proteolysis of Notch. Aph-1 and Nct may form a subcomplex that stabilizes the Psn holoprotein at an early step in γ-secretase assembly. Subcomplex levels of Aph-1 are down-regulated by stepwise addition of Psn, suggesting that Aph-1 might not enter the mature complex. In contrast, Pen-2 accumulates proportionally with Psn, and is associated with Psn endoproteolysis during γ-secretase assembly. These results demonstrate that Aph-1 and Pen-2 are essential cofactors for Psn, but that they play different roles in γ-secretase assembly and activation.