A key event in the pathogenesis of Alzheimer's disease (AD) is the deposition of senile plaques consisting largely of a peptide known as beta-amyloid (Abeta) that is derived from the amyloid precursor protein (APP). A proteolytic activity called gamma-secretase cleaves APP in the transmembrane domain and is required for Abeta generation. Aberrant gamma-secretase cleavage of APP underlies the majority of early onset, familial AD. gamma-Secretase resides in a large multi-protein complex, of which Presenilin, Nicastrin, APH-1 and PEN-2 are four essential components. Thus, identifying components and pathways by which the gamma-secretase activity is regulated is crucial to understanding the mechanisms underlying AD pathogenesis, and may provide new diagnostic tools and therapeutic targets. Here we describe the generation of Drosophila that act as living reporters of gamma-secretase activity in the fly eye. In these reporter flies the size of the eye correlates with the level of endogenous gamma-secretase activity, and is very sensitive to the levels of three genes required for APP gamma-secretase activity, presenilin, nicastrin and aph-1. Thus, these flies provide a sensitized system with which to identify other components of the gamma-secretase complex and regulators of its activity. We have used these flies to carry out a screen for mutations that suppress gamma-secretase activity and have identified a small chromosomal region that contains a gene or genes whose products may promote gamma-secretase activity.