Abstract Beta amyloid peptide is generated from amyloid precursor protein (APP) by proteolytic cleavage of β- and γ-secretases, and plays a critical role in the pathogenesis of Alzheimer’s disease. Since γ-secretase cleaves several proteins including APP and Notch in a number of cell types, it is important to understand the conditions determining γ-secretase substrate specificity. In the present study, inhibition of Rac1 attenuated γ-secretase activity for APP, resulting in decreased production of the APP intracellular domain but accumulated C-terminal fragments (APP-CTF). In contrast, Rac1 inhibitor, NSC23766 increased production of the Notch1 intracellular domain but slightly decreased the ectodomain-shed form of Notch1 (NotchΔE). To elucidate the mechanism underlying these observations, we performed co-immunoprecipitation experiments to analyze the interaction between Rac1 and presenilin1 (PS1), a component of the γ-secretase complex. Inhibition of Rac1 enhanced its interaction with PS1. Under the same condition, PS1 interacted more strongly with NotchΔE than with APP-CTF. Our results suggested that PS1 determines the preferred substrate for γ-secretase between APP and Notch1, depending on the activation status of Rac1.