Nectin-1 is a member of the immunoglobulin superfamily and a Ca(2+)-independent adherens junction protein involved in synapse formation. Here we show that nectin-1alpha undergoes intramembrane proteolytic processing analogous to that of the Alzheimer's disease amyloid precursor protein, mediated by a presenilin (PS)-dependent gamma-secretase-like activity. 12-O-tetradecanoylphorbol-13-acetate (TPA) treatment of Chinese hamster ovary cells activated a first proteolytic event, resulting in ectodomain shedding of nectin-1alpha. Subsequent cleavage of the remaining 26-kDa membrane-anchored C-terminal fragment (CTF) was inhibited independently by three specific gamma-secretase inhibitors and by expression of the dominant negative form of PS1. The PS/gamma-secretase-like cleavage product was detected in vivo following proteasome inhibitor treatment of cells. An in vitro gamma-secretase assay confirmed the generation of a 24-kDa nectin-1alpha intracellular domain, peripherally associated with the membrane fraction. We also found nectin-1alpha to interact with the N-terminal fragment of PS1. Finally, gamma-secretase inhibition resulted in beta-catenin release from cell junctions, concomitantly with the accumulation of the 26-kDa nectin-1alpha CTF, suggesting that high levels of nectin-1alpha CTF interfere with TPA-induced remodeling of cell-cell junctions. Our results are consistent with a previously reported role for PS/gamma-secretase in adherens junction function involving cleavage of cadherins. Similar to nectin-1, other members of the immunoglobulin superfamily involved in synapse formation may also serve as substrates for PS/gamma-secretase-like intramembrane proteolytic activity.