Recent data suggest an intimate relationship between the familial Alzheimer disease gene presenilin 1 (PS1) and proteolytic processing of both the amyloid precursor protein (APP) and the important cell signaling molecule, Notch1. We now show, using mammalian cells transfected with full-length Notch1, that the C terminal domain of Notch1 rapidly translocates to the nucleus upon stimulation with the physiologic ligand Delta and initiates a CBF1-dependent signal transduction cascade. Using this assay, we demonstrate that the same aspartate mutations in PS1 that block APP processing also prevent Notch1 cleavage and translocation to the nucleus. Moreover, we show that two APP gamma-secretase inhibitors also diminish Notch1 nuclear translocation in a dose-dependent fashion. However, Notch1 signaling, assessed by measuring the activity of CBF1, a downstream gene, was reduced but not completely abolished in the presence of either aspartate mutations or gamma-secretase inhibitors. Our results support the hypothesis that similar PS1-related enzymatic activity is necessary for both APP and Notch1 processing, yet suggest that Notch signaling may remain relatively preserved with moderate levels of gamma-secretase inhibition.