Transforming growth factor-β (TGFβ) can be both a tumor promoter and suppressor, although the mechanisms behind the protumorigenic switch remain to be fully elucidated. The TGFβ type I receptor (TβRI) is proteolytically cleaved in the ectodomain region. Cleavage requires the combined activities of tumor necrosis factor (TNF) receptor-associated factor 6 (TRAF6) and TNF-α-converting enzyme (TACE). The cleavage event occurs selectively in cancer cells and generates an intracellular domain (ICD) of TβRI, which enters the nucleus to mediate gene transcription. Presenilin 1 (PS1), a γ-secretase catalytic core component, mediates intramembrane proteolysis of transmembrane receptors, such as Notch. We showed that TGFβ increased both the abundance and activity of PS1. TRAF6 recruited PS1 to the TβRI complex and promoted lysine-63-linked polyubiquitination of PS1, which activated PS1. Furthermore, PS1 cleaved TβRI 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, TβRI-ICD bound to the promoter and increased the transcription of the gene encoding TβRI. The TRAF6- and PS1-induced intramembrane proteolysis of TβRI promoted TGFβ-induced invasion of various cancer cells in vitro. Furthermore, when a mouse xenograft model of prostate cancer was treated with the γ-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 TβRI-ICD was prevented, transcription of the gene encoding the proinvasive transcription factor Snail1 was reduced, and tumor growth was inhibited. These results suggest that γ-secretase inhibitors may be useful for treating aggressive prostate cancer.