The cleavage of proteins within their transmembrane domain by Presenilin (PS) has an important role in different signalling pathways and in Alzheimer's disease. Nevertheless, not much is known about the regulation of PS activity. It has been suggested that substrate recognition by the PS complex depends only on the size of the extracellular domain independent of the amino-acid sequence and that PS activity is constitutive in all cells that express the minimal components of the complex. We report here the development of an in vivo reporter system that allowed us to analyse the processing of human amyloid precursor protein (APP) and the Notch receptor tissue specifically during Drosophila development in the living organism. Using this system, we demonstrate differences between APP and Notch processing and show that PS-mediated cleavage of APP can be regulated in different cell types independent of the size of the extracellular domain.