gamma-Secretase is a critical enzyme involved in the production of amyloid-beta (Abeta) peptide, one of the main pathological hallmarks of Alzheimer's disease. gamma-Secretase cleaves the beta-amyloid precursor protein (betaAPP) at a position predicted to be within the membrane. In addition to betaAPP, gamma-secretase cleaves a range of other substrates. Thus, a key question in the development of gamma-secretase inhibitors for preventing Abeta production is whether undesired mechanism-based side effects may result from inhibition of cleavage of other substrates, and if so whether a suitable window exists to reduce brain Abeta. In this review, progress in the development of small-molecule inhibitors will be described, and potential toxicity issues associated with the development of gamma-secretase inhibitors discussed.