Gamma-secretase is a high molecular weight multicomponent protein complex with an unusual intramembrane-cleaving aspartyl protease activity. Gamma-secretase is intimately associated with Alzheimer disease because it catalyzes the proteolytic cleavage, which leads to the liberation of amyloid beta-peptide. At least presenilin (PS), Nicastrin (Nct), APH-1, and PEN-2 are constituents of the gamma-secretase complex, with PS apparently providing the active site of gamma-secretase. Expression of gamma-secretase complex components is tightly regulated, however little is known about the assembly of the complex. Here we demonstrate that Nct undergoes a major conformational change during the assembly of the gamma-secretase complex. The conformational change is directly associated with gamma-secretase function and involves the entire Nct ectodomain. Loss of function mutations generated by deletions failed to undergo the conformational change. Furthermore, the conformational alteration did not occur in the absence of PS. Our data thus suggest that gamma-secretase function critically depends on the structural "activation" of Nct.