Alzheimer's disease-related presenilins are thought to be involved in Notch signaling during embryonic development and/or cellular differentiation. Proteins mediating the cellular functions of the presenilins are still unknown. We utilized the yeast two-hybrid system to identify an interacting armadillo protein, termed p0071, that binds specifically to the hydrophilic loop of presenilin 1. In vivo, the presenilins constitutively undergo proteolytic processing, forming two stable fragments. Here, we show that the C-terminal fragment of presenilin 1 directly binds to p0071. Nine out of 10 armadillo repeats in p0071 are essential for mediating this interaction. Since armadillo proteins, like beta-catenin and APC, are known to participate in cellular signaling, p0071 may function as a mediator of presenilin 1 in signaling events.