Perturbations in intracellular Ca2+ signaling may represent one mechanism underlying Alzheimer's disease (AD). The presenilin-1 gene (PS1), associated with the majority of early onset familial AD cases, has been implicated in this signaling pathway. Here we used the Xenopus oocyte expression system to investigate in greater detail the role of PS1 in intracellular Ca2+ signaling pathways. Treatment of cells expressing wild-type PS1 with a cell surface receptor agonist to stimulate the phosphoinositide second messenger pathway evoked Ca2+-activated Cl- currents that were significantly potentiated relative to controls. To determine which elements of the signal transduction pathway are responsible for the potentiation, we used photolysis of caged inositol 1,4,5-trisphosphate (IP3) and fluorescent Ca2+ imaging to demonstrate that PS1 potentiates IP3-mediated release of Ca2+ from internal stores. We show that an AD-linked mutation produces a potentiation in Ca2+ signaling that is significantly greater than that observed for wild-type PS1 and that cannot be attributed to differences in protein expression levels. Our findings support a role for PS1 in modulating IP3-mediated Ca2+ liberation and suggest that one pathophysiological mechanism by which PS1 mutations contribute to AD neurodegeneration may involve perturbations of this function.