Presenilin 1, a causative gene product of familial Alzheimer disease, has been reported to be localized mainly in the endoplasmic reticulum and Golgi membranes. However, endogenous Presenilin 1 also localizes at the plasma membrane as a biologically active molecule. Presenilin 1 interacts with N-cadherin/beta-catenin to form a trimeric complex at the synaptic site through its loop domain, whose serine residues (serine 353 and 357) can be phosphorylated by glycogen synthase kinase 3beta. Here, we demonstrate that cell-surface expression of Presenilin 1/gamma-secretase is enhanced by N-cadherin-based cell-cell contact. Physical interaction between Presenilin 1 and N-cadherin/beta-catenin plays an important role in this process. Glycogen synthase kinase 3beta-mediated phosphorylation of Presenilin 1 reduces its binding to N-cadherin, thereby down-regulating its cell-surface expression. Moreover, reduction of the Presenilin 1.N-cadherin.beta-catenin complex formation leads to an impaired activation of contact-mediated phosphatidylinositol 3-kinase/Akt cell survival signaling. Furthermore, phosphorylation of Presenilin 1 hinders epsilon-cleavage of N-cadherin, whereas epsilon-cleavage of APP remained unchanged. This is the first report that clarifies the regulatory mechanism of Presenilin 1/gamma-secretase with respect to its subcellular distribution and its differential substrate cleavage. Because the cleavage of various membrane proteins by Presenilin 1/gamma-cleavage is involved in cellular signaling, glycogen synthase kinase 3beta-mediated phosphorylation of Presenilin 1 should be deeply associated with signaling functions. Our findings indicate that the abnormal activation of glycogen synthase kinase 3beta can reduce neuronal viability and synaptic plasticity via modulating Presenilin 1/N-cadherin/beta-catenin interaction and thus have important implications in the pathophysiology of Alzheimer disease.