gamma-Secretase is a unique protease which cleaves within the transmembrane domain of several substrate proteins. Among gamma-secretase substrates are members of the Notch family of receptors and the amyloid precursor protein. In this study we used a cell-free Notch-cleavage assay and specific gamma-secretase inhibitors to study the cleavage of Notch by gamma-secretase. Using this assay, we found that, in contrast to previous reports, the presence of valine at the P1' position of Notch1 is not required for gamma-secretase cleavage. Our results suggest that the presence of valine at the N-terminus of the Notch intracellular domain cleavage product is important for its stability. Thus it appears that Notch cleavage is very similar to APP cleavage with respect to the lack of sequence specificity. (C) 2002 Elsevier Science (USA). All rights reserved.