PRESENILIN 2 (PSEN2) is one of the genes mutated in early onset familial Alzheimer's disease (EOfAD). PSEN2 shares significant amino acid sequence identity with another EOfAD-related gene PRESENILIN 1 (PSEN1), and partial functional redundancy is seen between these two genes. However, the complete range of functions of PSEN1 and PSEN2 is not yet understood. In this study, we performed targeted mutagenesis of the zebrafish psen2 gene to generate a premature termination codon close downstream of the translation start with the intention of creating a null mutation. Homozygotes for this mutation, psen2S4Ter, are viable and fertile, and adults do not show any gross psen2-dependent pigmentation defects, arguing against significant loss of γ-secretase activity. Also, assessment of the numbers of Dorsal Longitudinal Ascending (DoLA) interneurons that are responsive to psen2 but not psen1 activity during embryogenesis did not reveal decreased psen2 function. Transcripts containing the S4Ter mutation show no evidence of destabilization by nonsense-mediated decay. Forced expression in zebrafish embryos of fusions of psen2S4Ter 5' mRNA sequences with sequence encoding enhanced green fluorescent protein (EGFP) indicated that the psen2S4Ter mutation permits utilization of cryptic, novel downstream translation start codons. These likely initiate translation of N-terminally truncated Psen2 proteins lacking late endosomal/lysosomal localization sequences and that obey the "reading frame preservation rule" of PRESENILIN EOfAD mutations. Transcriptome analysis of entire brains from a 6-month-old family of wild type, heterozygous and homozygous psen2S4Ter female siblings revealed profoundly dominant effects on gene expression likely indicating changes in ribosomal, mitochondrial, and anion transport functions.