Mutations in the presenilin genes, PS1 and PS2, cause a major portion of early onset familial Alzheimer's disease (FAD). The biological roles of the presenilins and how their pathological mutations confer FAD are unknown. In this study, we set out to examine the processing and degradation pathways of PS2. For regulated expression of PS2, we have established inducible cell lines expressing PS2 under the tight control of the tetracycline-responsive transactivator. Western blot analysis revealed that PS2 was detected as an approximately 53-55-kDa polypeptide (54-kDa PS2) as well as a high molecular mass form (HMW-PS2). Using a stably transfected, inducible cell system, we have found that PS2 is proteolytically cleaved into two stable cellular polypeptides including an approximately 20-kDa C-terminal fragment and an approximately 34-kDa N-terminal fragment. PS2 is polyubiquitinated in vivo, and the degradation of PS2 is inhibited by proteasome inhibitors, N-acetyl-L-leucinal-L-norleucinal and lactacystin. Our studies suggest that PS2 normally undergoes endoproteolytic cleavage and is degraded via the proteasome pathway.