In the brain of Alzheimer's disease (AD) patients, neurotoxic amyloid peptides accumulate and are deposited as senile plaques. A major therapeutic strategy aims to decrease production of amyloid peptides by inhibition of gamma-secretase. Presenilins are polytopic transmembrane proteins that are essential for gamma-secretase activity during development and in amyloid production. By loxP/Cre-recombinase-mediated deletion, we generated mice with postnatal, neuron-specific presenilin-1 (PS1) deficiency, denoted PS1(n-/-), that were viable and fertile, with normal brain morphology. In adult PS1(n-/-) mice, levels of endogenous brain amyloid peptides were strongly decreased, concomitant with accumulation of amyloid precursor protein (APP) C-terminal fragments. In the cross of APP[V717I]xPS1 (n-/-) double transgenic mice, the neuronal absence of PS1 effectively prevented amyloid pathology, even in mice that were 18 months old. This contrasted sharply with APP[V717I] single transgenic mice that all develop amyloid pathology at the age of 10-12 months. In APP[V717I]xPS1 (n-/-) mice, long-term potentiation (LTP) was practically rescued at the end of the 2 hr observation period, again contrasting sharply with the strongly impaired LTP in APP[V717I] mice. The findings demonstrate the critical involvement of amyloid peptides in defective LTP in APP transgenic mice. Although these data open perspectives for therapy of AD by gamma-secretase inhibition, the neuronal absence of PS1 failed to rescue the cognitive defect, assessed by the object recognition test, of the parent APP[V717I] transgenic mice. This points to potentially detrimental effects of accumulating APP C99 fragments and demands further study of the consequences of inhibition of gamma-secretase activity. In addition, our data highlight the complex functional relation of APP and PS1 to cognition and neuronal plasticity in adult and aging brain.