γ-Secretase is a multimeric membrane protein complex composed of presenilin (PS), nicastrin, Aph-1 and, Pen-2 that is responsible for the intramembrane proteolysis of various type I transmembrane proteins, including amyloid β-precursor protein and Notch. The direct labeling of PS polypeptides by transition-state analogue γ-secretase inhibitors suggested that PS represents the catalytic center of γ-secretase. Here we show that one of the major γ-secretase inhibitors of dipeptidic type, N-[N-(3,5-difluorophenacetyl)-L-alanyl]-S-phenylglycine t-butyl ester (DAPT), targets the C-terminal fragment of PS, especially the transmembrane domain 7 or more C-terminal region, by designing and synthesizing DAP-BpB (N-[N-(3,5-difluorophenacetyl)-L-alanyl]-(S)-phenylglycine-4-(4-(8-biotinamido) octylamino)benzoyl)benzyl)methylamide), a photoactivable DAPT derivative. We also found that DAP-BpB selectively binds to the high molecular weight γ-secretase complex in an activity-dependent manner. Photolabeling of PS by DAP-BpB is completely blocked by DAPT or its structural relatives (e.g. Compound E) as well as by arylsulfonamides. In contrast, transition-state analogue inhibitor L-685,458 or α-helical peptidic inhibitor attenuated the photolabeling of PS1 only at higher concentrations. These data illustrate the DAPT binding site as a novel functional domain within the PS C-terminal fragment that is distinct from the catalytic site or the substrate binding site.