The 19-transmembrane γ-secretase complex generates the amyloid β-peptide of Alzheimer's disease by intramembrane proteolysis of the β-amyloid precursor protein. This complex is comprised of presenilin, Aph1, nicastrin, and Pen-2. The exact function and mechanism of the highly conserved Pen-2 subunit remain poorly understood. Using systematic mutagenesis, we confirm and extend our understanding of which key regions and specific residues play roles in various aspects of γ-secretase function, including maturation, localization, and activity, but not processivity. In general, mutations (1) within the first half of transmembrane domain (TMD) 1 of Pen-2 decreased PS1 endoproteolysis and γ-secretase proteolytic activity, (2) within the second half of TMD1 increased proteolytic activity, (3) within the cytosolic loop region decreased proteolytic activity, (4) within TMD2 decreased PS1 endoproteolysis, (5) within the first half of TMD2 decreased proteolytic activity, and (6) within C-terminal residues decreased proteolytic activity. Specific mutational effects included N33A in TMD1 causing an increase in γ-secretase complexes at the cell surface and a modest decrease in stability and the previously unreported I53A mutation in the loop region reducing stability 10-fold and proteolytic activity by half. In addition, we confirm that minor PS1 endoproteolysis can occur in the complete absence of Pen-2. Together, these data suggest that rather than solely being a catalyst for γ-secretase endoproteolysis, Pen-2 may also stabilize the complex prior to PS1 endoproteolysis, allowing time for full assembly and proper trafficking.