Presenilins are membrane proteins with multiple transmembrane domains that are thought to contribute to the development of Alzheimer's disease by affecting the processing of beta-amyloid precursor protein. Presenilins also facilitate the activity of transmembrane receptors of the LIN-12/Notch family. After ligand-induced processing, the intracellular domain of LIN-12/Notch can enter the nucleus and participate in the transcriptional control of downstream target genes. Here we show that null mutations in the Drosophila Presenilin gene abolish Notch signal transduction and prevent its intracellular domain from entering the nucleus. Furthermore, we provide evidence that presenilin is required for the proteolytic release of the intracellular domain from the membrane following activation of Notch by ligand.