Presenilin 1 interacts with beta-catenin, an essential component of the Wnt signaling pathway. To elucidate the role of presenilin 1-beta-catenin interaction in neuronal differentiation, we established SH-SY5Y cells stably expressing wild-type presenilin 1, P117L mutant presenilin 1, which is linked to the early-onset familial form of Alzheimer's disease, and D385A mutant presenilin 1, which has no aspartyl proteinase activity. We demonstrate that SH-SY5Y cells stably expressing D385A mutant presenilin 1 failed to differentiate in response to retinoic acid treatment. Retinoic acid caused an increase in nuclear beta-catenin levels in SH-SY5Y cells, which was followed by an increase in cyclin D1 protein levels. Abnormal cellular accumulation of beta-catenin was observed in D385A mutant transfected cells, whereas nuclear beta-catenin and cellular cyclin D1 levels failed to increase. Conversely, SH-SY5Y cells expressing the P117L mutant differentiated normally and showed increased nuclear beta-catenin and cellular cyclin D1 levels. These findings suggest that neuronal differentiation of SH-SY5Y cells involves the Wnt signaling pathway and that presenilin 1 plays a crucial role in Wnt signal transduction by regulating the nuclear translocation of beta-catenin. Copyright 2003 Wiley-Liss, Inc.