The Alzheimer's disease-linked protein, presenilin, forms the active site of the gamma-secretase enzyme complex. However, three other proteins, nicastrin (NCT), PEN-2 and APH-1, are required for enzyme activity. This complex is responsible for cleaving the beta-amyloid precursor protein to produce amyloid beta and the intracellular domain (AICD). Although much research has focused on the regions of presenilin that are important for gamma-secretase function, less is known about NCT. To further our understanding of the role of NCT in gamma-secretase activity and complex formation, we have undertaken a systematic evaluation of conserved residues in the juxtamembrane region of the extracellular domain of NCT. Two mutants, S632A and W648A, greatly reduce gamma-secretase activity, as seen by a reduction in amyloid beta and AICD levels. Several lines of evidence suggest that these mutations result in reduced gamma-secretase activity because they affect the ability of NCT to stably associate with the other gamma-secretase components. Since NCT and APH-1 must first bind in order for presenilin and PEN-2 to stably join the complex, we propose that S632 and W648 are essential for a stable interaction with APH-1.