NUMEROUS mutations in the presenilin (PS) genes cause early onset familial Alzheimer's disease (FAD). Here we characterize the expression of two naturally occurring alternative PS2 transcripts which lack either exons 3 and 4 (PS2 Δexon 3,4) or exons 3, 4, and 8 (PS2 Δexon 3,4,8). These transcripts do not contain the natural initiation codon within exon 3. The transcripts are efficiently translated as N-terminal truncated proteins. These deleted proteins are still able to regulate formation of endogenous PS fragments, indicating that the C-terminal half of the PS2 protein is sufficient for this phenomenon. Although ∼50% of the PS1 and both PS2 mutations occur within the N-terminal region lacking in the PS2 Δexon3,4 and PS2 Δexon3,4,8 proteins, expression of these truncated proteins does not affect pathological generation of amyloidβ-peptide (Aβ). This suggests that point mutations causing AD are gain of function mutations.