The amyloid precursor protein is cleaved within its ectodomain by beta-amyloid-converting enzyme (BACE) yielding C99, which is further cleaved by gamma-secretase within its putative transmembrane domain (TMD). Because it is difficult to envisage how a protease may cleave within the membrane, alternative mechanisms have been proposed for gamma-cleavage in which the TMD is shorter than predicted or positioned such that the gamma-cleavage site is accessible to cytosolic proteases. Here, we have biochemically determined the length of the TMD of C99 in microsomal membranes. Using a single cysteine mutagenesis scan of C99 combined with cysteine modification with a membrane-impermeable labeling reagent, we identified which residues are accessible to modification and thus located outside of the membrane. We find that in endoplasmic reticulum-derived microsomes the TMD of C99 consists of 12 residues that span from residues 37 to 48, which is N- and C-terminally shorter than predicted. Thus, the gamma-cleavage sites are positioned around the middle of the lipid bilayer and are unlikely to be accessible to cytosolic proteases. Moreover, the center of the TMD is positioned at the gamma-cleavage site at residue 42. Our data are consistent with a model in which gamma-secretase is a membrane protein that cleaves at the center of the membrane.