Deposition of amyloid beta peptide (A beta) as senile plaques or cerebrovascular amyloid characterizes the brains of patients with Alzheimer's disease (AD). A beta are composed of 40-42 amino acids that are proteolytically produced from its precursor beta APP. We have shown that the deposition of A beta ending at the 42nd residue (A beta 42) is one of the earliest pathological changes in AD brains. Genetic and cell biological evidence strongly suggest that mutations in beta APP or presenilin (PS) 1 and 2 genes cause AD through increase in production of A beta 42. Recently, PS1 and PS2 are shown to be the catalytic subunits of gamma-secretase that cleaves the intramembrane segments of beta APP and Notch. beta-amyloid hypothesis that emphasizes the primacy of A beta in the pathogenesis of AD is currently being verified by the new experimental therapeutic approaches, e.g., A beta vaccine therapy or administration of inhibitors of beta- or gamma-secretases. The mechanistic roles of newly identified co-factor proteins of PS (i.e., APH-1 and PEN-2) in gamma-secretase function, as well as recent advances in the development of gamma- or beta-secretase inhibitors will be discussed.