Succeeding the b-secretase cleavage of APP, a second cleavage occurs that releases Ab from C99. This cleavage occurs in the vicinity of residue 712 of the C-terminus. The g-secretase can cleave the C-terminal region at either Val⁷¹¹ or Ile⁷¹³ to produce a shorter Ab peptide (Ab1-40) or the longer Ab peptide (Ab1-42). The predominant form of Ab found in the cerebrospinal fluid is the shorter Ab40 peptide. Despite its lower rate of synthesis, Ab42 is the peptide that is initially deposited within the extracellular plaques of AD patients. In addition, Ab42 is shown to aggregate at a much lower concentration than the Ab40 form.

The presenilins (PS1 and PS2) are reported to play an important role in this C99 processing. They are tightly linked to g-secretase mediated cleavage and probably constitute part of the g-secretase complex along with Aph-1, Pen-2 and Nicastrin. PS1 has been suggested to have either inherent g-secretase activity or act as a co-factor for g-secretase. More recent studies of Li et al. have indicated that the active site of g-secretase is shared between the N- and C-terminal fragments of presenilin. Cells obtained from PS1/PS2 double knockout mice do not show any g-secretase activity. Presenilins are also involved in the regulation of Notch signaling that is important in framing cell destiny during embryogenesis, hematopoiesis, and neural stem cell differentiation.