The carboxyl terminus of presenilin 1 and 2 (PS1 and PS2) binds to the neuron-specific cell adhesion molecule telencephalin (TLN) in the brain. PS1 deficiency results in the abnormal accumulation of TLN in a yet unidentified intracellular compartment. The first transmembrane domain and carboxyl terminus of PS1 form a binding pocket with the transmembrane domain of TLN. Remarkably, APP binds to the same regions via part of its transmembrane domain encompassing the critical residues mutated in familial Alzheimer's disease. Our data surprisingly indicate a spatial dissociation between the binding site and the proposed catalytic site near the critical aspartates in PSs. They provide important experimental evidence to support a ring structure model for PS.