One of the cardinal neuropathological findings in brains from Alzheimer's disease (AD) patients is the occurrence of amyloid beta-peptide (Abeta) deposits. The gamma-secretase-mediated intramembrane proteolysis event generating Abeta also results in the release of the APP intracellular domain (AICD), which may mediate nuclear signaling. It was recently shown that AICD starts at a position distal to the site predicted from gamma-secretase cleavage within the membrane. This novel site, the epsilon site, is located close to the inner leaflet of the membrane bilayer. The relationship between proteolysis at the gamma and epsilon sites has not been fully characterized. Here we studied AICD signaling in intact cells using a chimeric C99 molecule and a luciferase reporter system. We show that the release of AICD from the membrane takes place in a compartment downstream of the endoplasmic reticulum, is dependent on presenilin proteins, and can be inhibited by treatment with established gamma-secretase inhibitors. Moreover, we find that AICD signaling remains unaltered from C99 derivatives containing mutations associated with increased Abeta42 production and familial AD. These findings indicate that there are very similar routes for Abeta and AICD formation but that FAD-linked mutations in APP primarily affect gamma-secretase-mediated Abeta42 formation, and not AICD signaling.