A key event in the pathogenesis of Alzheimer's disease (AD) is the deposition of senile plaques consisting largely of a peptide known as β-amyloid (Aβ) that is derived from the amyloid precursor protein (APP). A proteolytic activity called γ-secretase cleaves APP in the transmembrane domain and is required for Aβ generation. Aberrant γ-secretase cleavage of APP underlies the majority of early onset, familial AD. γ-Secretase resides in a large multi-protein complex, of which Presenilin, Nicastrin, APH-1 and PEN-2 are four essential components. Thus, identifying components and pathways by which the γ-secretase activity is regulated is crucial to understanding the mechanisms underlying AD pathogenesis, and may provide new diagnostic tools and therapeutic targets. Here we describe the generation of Drosophila that act as living reporters of γ-secretase activity in the fly eye. In these reporter flies the size of the eye correlates with the level of endogenous γ-secretase activity, and is very sensitive to the levels of three genes required for APP γ-secretase activity, presenilin, nicastrin and aph-1. Thus, these flies provide a sensitized system with which to identify other components of the γ-secretase complex and regulators of its activity. We have used these flies to carry out a screen for mutations that suppress γ-secretase activity and have identified a small chromosomal region that contains a gene or genes whose products may promote γ-secretase activity.