The effects of compounds interfering with gamma-secretase, the enzymatic complex responsible of the formation of the amyloid-beta (Abeta) peptide from amyloid-beta protein precursor (AbetaPP), on plaque deposition in transgenic mouse models of Alzheimer's disease are known but scanty data are available on the effects of these drugs on brain plasticity. We evaluated the effects of long-term treatment with CHF5074, a new gamma-secretase modulator, on hippocampal neurogenesis, cortical synaptophysin levels, and contextual memory in transgenic mice carrying the double Swedish mutation of AbetaPP (Tg2576). Six-month old Tg2576 mice were treated with CHF5074 (375 ppm in the diet) up to 15 months of age. Age-matched control transgenic and wild-type mice received standard diet. Compared to wild-type animals, transgenic controls showed a significant decrease in the number of doublecortin-positive neuroblasts in dentate gyrus, synaptophysin intensity in the cortex, freezing to context in the contextual fear conditioning test. Compared to transgenic controls, CHF5074 treatment of Tg2576 mice resulted in a significant attenuation of the neurogenesis impairment in hippocampus (p=0.036), normalization of synaptophysin levels in cortex (p< 0.001), attenuation of plaque burden in the cortex (p=0.033), increases astroglial reaction around plaques (p=0.001), and attenuation of activated microglia (p=0.040). These effects were associated to a complete reversal of contextual memory deficit (p=0.006). Contextual memory significantly correlated with synaptophysin immunoreactivity in the cortex (r=0.548, p=0.0038).