The amyloid hypothesis, which states that beta-amyloid (Abeta) aggregates cause the onset and progression of Alzheimer's disease (AD), is a leading proposal to explain AD aetiology. Based on this hypothesis, compounds that inhibit gamma-secretase, one of the enzymes responsible for forming Abeta, are potential therapeutics for AD. Preclinical studies clearly establish that gamma-secretase inhibitors can reduce brain Abeta in rodent models. The initial investigation of the effects of a gamma-secretase inhibitor on Abeta-induced cognitive deficits in transgenic mice showed that modest Abeta reductions (15-30%) are sufficient to reverse Abeta-induced cognitive deficits in Tg2576 mice. Extending these studies to other gamma-secretase inhibitors and other models with Abeta-induced cognitive deficits will be important. Unfortunately, gamma-secretase inhibitors also cause abnormalities in the gastrointestinal tract, thymus and spleen in rodents. These changes likely result from inhibition of Notch cleavage, a transmembrane receptor involved in regulating cell-fate decisions. Two recent studies in rodents suggest that Abeta reduction using gamma-secretase inhibitors can be partially separated from Notch inhibition. Given the uncertain Abeta reduction target and the potential for mechanism-based toxicity, biomarkers for efficacy and toxicity would be helpful in clinical trials. The first report of gamma-secretase inhibitors in clinical trials was recently published. In this study, LY-450139 reduced plasma Abeta, but not cerebrospinal fluid Abeta. Taken together, the results of studies to date suggest that gamma-secretase inhibitors have the potential to address a large unmet medical need if the technical challenges can be overcome.