Gamma-secretase is an intramembranous protein complex that cleaves many type-I membrane proteins, including the Notch receptor and the beta-amyloid precursor protein (APP). Interest in gamma-secretase comes, in part, from the fact that this multiprotein complex is responsible for the cleavage of APP that generates the amyloid-beta peptide (Abeta), one of the primary components of amyloid plaques in Alzheimer's disease (AD). Over the last years, molecular identification of the complex has shown that gamma-secretase is an aspartyl protease composed of four different members that are essential for the enzymatic activity: presenilin 1, aph1, pen-2 and nicastrin. In recent years, an increasing number of type-I membrane proteins have been shown to be cleaved by gamma-secretase. How the enzyme cleaves such a set of substrates with diverse functions and subcellular localizations is not well understood. In overexpression assays, the gamma-secretase cleavage of some substrates releases intracellular domains with signaling properties. On the other hand, the loose specificity required for intramembrane cleavage has raised the possibility of gamma-secretase as the membrane proteasome. The impact of gamma-secretase on other substrates has clear implications for the development of new therapies for AD, and in particular for the search of gamma-secretase inhibitors or modulators. Interference with the cleavage of some of the gamma-secretase substrates has been shown to be associated with serious adverse effects in animal models. The understanding of the mechanism by which gamma-secretase recognizes and cleaves all these proteins is of great importance to clarify the function of gamma-secretase and its role as a therapeutic target in AD, and possibly in other diseases in which gamma-secretase is involved.