Alzheimer's disease is characterized by accumulation of toxic β-amyloid (Aβ) in the brain and neuronal death. Several mutations in presenilin (PS1) and β-amyloid precursor protein (APP) associate with an increased Aβ42/40 ratio. Aβ42, a highly fibrillogenic species, is believed to drive Aβ aggregation. Factors shifting γ-secretase cleavage of APP to produce Aβ42 are unclear. We investigate the molecular mechanism underlying altered Aβ42/40 ratios associated with APP mutations at codon 716 and 717. Using FRET-based fluorescence lifetime imaging to monitor APP-PS1 interactions, we show that I716F and V717I APP mutations increase the proportion of interacting molecules earlier in the secretory pathway, resulting in an increase in Aβ generation. A PS1 conformation assay reveals that, in the presence of mutant APP, PS1 adopts a conformation reminiscent of FAD-associated PS1 mutations, thus influencing APP binding to PS1/γ-secretase. Mutant APP affects both intracellular location and efficiency of APP-PS1 interactions, thereby changing the Aβ42/40 ratio.