Increased production of amyloid beta peptides ending at position 42 (Abeta42) is one of the pathogenic phenotypes caused by mutant forms of presenilins (PS) linked to familial Alzheimer's disease. To identify the subcellular compartment(s) in which familial Alzheimer's disease mutant PS2 (mt PS2) affects the gamma-cleavage of betaAPP to increase Abeta42, we co-expressed the C-terminal 99-amino acid fragment of betaAPP (C100) tagged with sorting signals to the endoplasmic reticulum (C100/ER) or to the trans-Golgi network (C100/TGN) together with mt PS2 in N2a cells. C100/TGN co-transfected with mt PS2 increased levels or ratios of intracellular as well as secreted Abeta42 at similar levels to those with C100 without signals (C100/WT), whereas C100/ER yielded a negligible level of Abeta, which was not affected by co-transfection of mt PS2. To identify the molecular subdomain of betaAPP required for the effects of mt PS2, we next co-expressed C100 variously truncated at the C-terminal cytoplasmic domain together with mt PS2. All types of C-terminally truncated C100 variants including that lacking the entire cytoplasmic domain yielded the secreted form of Abeta at levels comparable with those from C100/WT, and co-transfection of mt PS2 increased the secretion of Abeta42. These results suggest that (i) late intracellular compartments including TGN are the major sites in which Abeta42 is produced and up-regulated by mt PS2 and that (ii) the anterior half of C100 lacking the entire cytoplasmic domain is sufficient for the overproduction of Abeta42 caused by mt PS2.