Mutation of the amyloid precursor protein (APP), presenilin-1, or presenilin-2 results in the development of early onset autosomal dominant forms of Alzheimer disease (AD). These mutations lead to an increased Abeta42/Abeta40 ratio that correlates with the onset of disease. However, it remains unknown how these mutations affect gamma-secretase, a protease that generates the termini of Abeta40 and Abeta42. Here we have determined the reaction mechanism of gamma-secretase with wild type and three mutated APP substrates. Our findings indicate that despite the overall outcome of an increased Abeta42/Abeta40 ratio, these mutations each display rather distinct reactivity to gamma-secretase. Intriguingly, we found that the ratio of Abeta42/Abeta40 is variable with substrate concentration; increased substrate concentrations result in higher ratios of Abeta42/Abeta40. Moreover, we demonstrated that reduction of gamma-secretase substrate concentration by BACE1 inhibition in cells decreased the Abeta42/Abeta40 ratio. This study indicates that biological factors affecting targets such as BACE1 and APP, which ultimately cause an increased concentration of gamma-secretase substrate, can augment the Abeta42/Abeta40 ratio and may play a causative role in sporadic AD. Therefore, strategies lowering the Abeta42/Abeta40 ratio through partial reduction of gamma-secretase substrate production may introduce a practical therapeutic modality for treatment of AD.