gamma-Secretase mediates the intramembranous proteolysis of amyloid precursor protein (APP), Notch and other cellular substrates and is considered a prime pharmacological target in the development of therapeutics for Alzheimer's disease (AD). We describe here an efficient, new, simple, sensitive and rapid assay to quantify gamma-secretase activity in living cells by flow cytometry using two membrane-bound fluorescent probes, APP-GFP or C99-GFP, as substrates for gamma-secretase. The principle of the assay is based on the fact that the soluble intracellular domain of GFP-tagged APP (AICD-GFP) is released from the membrane into the cytosol following gamma-secretase cleavage. Using this feature, enzymatic activity of gamma-secretase could be deduced from the extent of the membrane retention of the probe observed after plasma membrane permeabilization and washout of the cleaved fraction. By applying two well-known gamma-secretase inhibitors (DAPT and L-685,458), we validated our assay showing that the positional GFP-based probes for gamma-secretase activity behave properly when expressed in different cell lines, providing the basis for the further development of a high-throughput and high content screening for AD targeted drug discovery. Moreover, by co-expression of different familial AD-linked mutated forms of presenilin--the key component of the gamma-secretase complex--in cells devoid of any endogenous gamma-secretase, our method allowed us to evaluate in situ the contribution of different presenilin variants to the modulation of the enzyme.