Dominantly inherited mutations in the genes encoding presenilins (PS) and the amyloid precursor protein (APP) are the major causes of familial Alzheimer's disease (AD). The prevailing view of AD pathogenesis posits that accumulation of beta-amyloid (Abeta) peptides, particularly Abeta42, is the central event triggering neurodegeneration. Emerging evidence, however, suggests that loss of essential functions of PS could better explain dementia and neurodegeneration in AD. First, conditional inactivation of PS in the adult mouse brain causes progressive memory loss and neurodegeneration resembling AD, whereas mouse models based on overproduction of Abeta have failed to produce neurodegeneration. Second, whereas pathogenic PS mutations enhance Abeta42 production, they typically reduce Abeta40 generation and impair other PS-dependent activities. Third, gamma-secretase inhibitors can enhance the production of Abeta42 while blocking other gamma-secretase activities, thus mimicking the effects of PS mutations. Finally, PS mutations have been identified in frontotemporal dementia, which lacks amyloid pathology. Based on these and other observations, we propose that partial loss of PS function may underlie memory impairment and neurodegeneration in the pathogenesis of AD. We also speculate that Abeta42 may act primarily to antagonize PS-dependent functions, possibly by operating as an active site-directed inhibitor of gamma-secretase.