γ-Secretase is an intramembrane-cleaving protease that generates various forms of amyloid-β peptides (Aβ) that accumulate in the brains of Alzheimer's disease (AD) patients. The intracellular trafficking and subcellular localization of γ-secretase are linked to both qualitative and quantitative changes in Aβ production. However, the precise intracellular localization of γ-secretase as well as its detailed regulatory mechanisms have remained elusive. Recent genetic studies on AD provide ample evidence that alteration of the subcellular localization of γ-secretase contributes to the pathogenesis of AD. Here we review our current understanding of the intracellular membrane trafficking of γ-secretase, the association between its localization and proteolytic activity, and the possibility of γ-secretase as a therapeutic target against AD.