Presenilin is a catalytic subunit of gamma-secretase, which hydrolyzes several transmembrane proteins within the lipid bilayer, together with binding cofactors such as nicastrin, Aph-1, and Pen-2. However, the structural basis as well as molecular mechanism of this unusual proteolytic process remains unknown. We have analyzed the structure and function relationships of presenilin using the substituted-cysteine accessibility method (SCAM), which enables identification of the hydrophilic environment by the accessibility of sulfhydryl reagents to cysteine residues introduced at a desired position. In combination with small molecule inhibitors/modulators and cross-linking experiments, we were able to identify certain residues and regions of presenilin that contribute to its intramembrane-cleaving activity. In addition, we revealed the structural dynamics of the transmembrane domains of presenilin during the formation of the complex and its proteolytic process. The SCAM provides new insights into the relationship between the structure and activity of presenilin, and is useful for probing the protein dynamics of the membrane-embedded enzymes.