γ-Secretase is a multimeric aspartyl protease that regulates signaling pathways by proteolytically cleaving substrates, abrogating or releasing signaling molecules. Two well-known substrates are the carboxyl-terminal fragments (CTFs) of the receptor Notch, which has key roles in development, and that of amyloid precursor protein (APP), which is important in Alzheimer’s disease. Compound E is a potent, cell-permeable, and selective inhibitor of γ-secretase, blocking the cleavage of both APP and Notch CTFs with IC50 values of ~0.3 nM. Compound E induces neuronal differentiation, impairs ovarian folliculogenesis, and suppresses thymocyte development by preventing Notch activation by γ-secretase.