γ-Secretase is a membrane-embedded protease complex that is crucial for many physiological processes throughout life. Due to its pivotal role in the etiology of Alzheimer's disease (AD), in particular the familial forms of the disease, the enzyme is one of the most studied intramembrane proteases and an important drug target. By cleaving a C-terminal fragment of the β-amyloid precursor protein (APP), γ-secretase generates several amyloid β-peptide (Aβ) species including longer, neurotoxic forms such as Aβ42 that are a widely believed to trigger AD. Besides APP, γ-secretase cleaves numerous other substrates including most prominently Notch1, whose cleavage by γ-secretase is essential for cell differentiation and affected in certain types of cancer. In this review, we will describe the exciting progress made in our understanding of how the γ-secretase complex recognizes and recruits its substrates to its catalytic subunit presenilin for their intramembrane proteolytic cleavage. This complicated process is not well understood and only recently insights from biochemical studies and structural biology are beginning to reveal this secret of γ-secretase.