Most cases of familial early-onset Alzheimer's disease are caused by mutations in the presenilin 1 (PS1) gene. However, the cellular functions of PS1 are unknown. We showed predominant localization of PS1 to cell-cell contacts of the plasma membrane in human prostate epithelial tissue and in a human epithelial cell line HEp2 stably transfected with an inducible PS1 construct. PS1 co-immunoprecipitated with beta-catenin from cell lysates of stable transfectants. Conversely, PS1 lacking the PS1-beta-catenin interaction site did not co-immunoprecipitate with beta-catenin and was not recruited to the cell-cell contacts. L cells, which do not form tight intercellular contacts, formed clusters of adhered cells after stable transfection with GFP-PS1 cDNA and demonstrated a clear preference for independent aggregation in the mixed cultures. However, L cells transfected with mutant GFP-PS1 constructs, which had a truncated N-terminus of PS1 or deleted PS1-beta-catenin interaction site, failed to form intercellular contacts. In addition, in primary cultures of mouse cortical neurons PS1 was highly concentrated on the surface of extended growth cones. Taken together, our results suggest an important role of PS1 in intercellular adhesion in epithelial cells and neurons.