Pathogenic generation of amyloid β-peptide (Aβ) by sequential cleavage of β-amyloid precursor protein (APP) by β- and γ-secretases is widely believed to causally underlie Alzheimer disease (AD). β-Secretase initially cleaves APP thereby generating a membrane-bound APP C-terminal fragment, from which γ-secretase subsequently liberates 37-43-amino acid long Aβ species. Although the latter cleavages are intramembranous and although lipid alterations have been implicated in AD, little is known of how the γ-secretase-mediated release of the various Aβ species, in particular that of the pathogenic longer variants Aβ(42) and Aβ(43), is affected by the lipid environment. Using a cell-free system, we have directly and systematically investigated the activity of γ-secretase reconstituted in defined model membranes of different thicknesses. We found that bilayer thickness is a critical parameter affecting both total activity as well as cleavage specificity of γ-secretase. Whereas the generation of the pathogenic Aβ(42/43) species was markedly attenuated in thick membranes, that of the major and rather benign Aβ(40) species was enhanced. Moreover, the increased production of Aβ(42/43) by familial AD mutants of presenilin 1, the catalytic subunit of γ-secretase, could be substantially lowered in thick membranes. Our data demonstrate an effective modulation of γ-secretase activity by membrane thickness, which may provide an approach to lower the generation of the pathogenic Aβ(42/43) species.