A ligand-induced extracellular cleavage regulates gamma-secretase-like proteolytic activation of Notch1

gamma-secretase-like proteolysis at site 3 (S3), within the transmembrane d omain, releases the Notch intracellular domain (NICD) and activates CSL-med iated Notch signaling. S3 processing occurs only in response to ligand bind ing; however, the molecular basis of this regulation is unknown. Here we de monstrate that ligand binding facilitates cleavage at a novel site (S2), wi thin the extracellular juxtamembrane region, which serves to release ectodo main repression of NICD production. Cleavage at S2 generates a transient in termediate peptide termed NEXT (Notch extracellular truncation). NEXT accum ulates when NICD production is blocked by point mutations or gamma-secretas e inhibitors or by loss of presenilin 1, and inhibition of NEXT eliminates NICD production. Our data demonstrate that S2 cleavage is a ligand-regulate d step in the proteolytic cascade leading to Notch activation.