We present an integrated approach to identify and optimize a novel class of γ-secretase modulators (GSMs) with a unique pharmacological profile. Our strategy included (i) virtual screening through application of a recently developed protocol (PhAST), (ii) synthetic chemistry to discover structure-activity relationships, and (iii) detailed in vitro pharmacological characterization. GSMs are promising agents for treatment or prevention of Alzheimer's disease. They modulate the γ-secretase product spectrum (i.e., amyloid-β (Aβ) peptides of different length) and induce a shift from toxic Aβ42 to shorter Aβ species such as Aβ38 with no or minimal effect on the overall rate of γ-secretase cleavage. We describe the identification of a series of 4-hydroxypyridin-2-one derivatives, which display a novel type of γ-secretase modulation with equipotent inhibition of Aβ42 and Aβ38 peptide species.