Transforming growth factor-beta (TGF beta) can be both a tumor promoter and suppressor, although the mechanisms behind the protumorigenic switch remain to be fully elucidated. The TGF beta type I receptor (T beta RI) is proteolytically cleaved in the ectodomain region. Cleavage requires the combined activities of tumor necrosis factor (TNF) receptor-associated factor 6 (TRAF6) and TNF-alpha-converting enzyme (TACE). The cleavage event occurs selectively in cancer cells and generates an intracellular domain (ICD) of T beta RI, which enters the nucleus to mediate gene transcription. Presenilin 1 (PS1), a gamma-secretase catalytic core component, mediates intramembrane proteolysis of transmembrane receptors, such as Notch. We showed that TGF beta increased both the abundance and activity of PS1. TRAF6 recruited PS1 to the T beta RI complex and promoted lysine-63-linked polyubiquitination of PS1, which activated PS1. Furthermore, PS1 cleaved T beta RI in the transmembrane domain between valine-129 and isoleucine-130, and ICD generation was inhibited when these residues were mutated to alanine. We also showed that, after entering the nucleus, T beta RI-ICD bound to the promoter and increased the transcription of the gene encoding T beta RI. The TRAF6- and PS1-induced intramembrane proteolysis of T beta RI promoted TGF beta-induced invasion of various cancer cells in vitro. Furthermore, when a mouse xenograft model of prostate cancer was treated with the gamma-secretase inhibitor DBZ {(2S)-2-[2-(3,5-difluorophenyl)-acetylamino]-N-(5-methyl-6-oxo-6,7-dihydro-5H-dibenzo[b, d]azepin-7-yl)-propionamide}, generation of T beta RI-ICD was prevented, transcription of the gene encoding the proinvasive transcription factor Snail1 was reduced, and tumor growth was inhibited. These results suggest that gamma-secretase inhibitors may be useful for treating aggressive prostate cancer.