Proteolytic processing of amyloid precursor protein (APP) plays a critical role in pathogenesis of Azheimer’s disease (AD). Sequential cleavage of APP by β and γ secretases leads to generation of Aβ40 (non-amyloidogenic) and Aβ42 (amyloidogenic) peptides. Presenilin-1 (PS1) or presenilin-2 (PS2) pay a role of catalytic subunit of γ-secretase. Multiple familial AD (FAD) mutations in APP, PS1, or PS2 result in increased Aβ42:Aβ40 ratio and accumulation of toxic Aβ42 oligomers and plaques in patient brains. In this study we performed molecular modeling of APP complex with γ-secretase and analyzed potential effects of FAD mutations in APP and PS1. We noticed that all FAD mutations in APP transmembrane domain are predicted to cause an increase in the local disorder of its secondary structure. Based on structural analysis of known γ-secretase structures we proposed that APP can form a complex with γ-secretase in 2 potential conformations – M1 and M2. In conformation M1 transmembrane domain of APP forms a contact with perimembrane domain that follows the transmembrane domain 6 (TM6) in PS1 structure. In conformation M2 transmembrane domain of APP forms a contact with transmembrane domain 7 (TM7) in PS1 structure. By analyzing effects of PS1-FAD mutations on local protein disorder index, we discovered that these mutations increase conformational flexibility of M2 and reduce conformational flexibility of M1. Based on these results we proposed that M2 conformation, but not M1 conformation, of γ secretase complex with APP leads to amyloidogenic (Aβ42-generating) processing of APP. Our model predicts that APP processing in M1 conformation is favored by a curved membranes, such as membranes of early endosomes. In contrast, APP processing in M2 conformation is likely to be favored by a relatively flat memranes such as membranes of late endosomes and plasma membrane. These predictions are consistent with published biochemical analysis of APP processing at different subcellular locations. Our results suggest that specific inhibitors of Aβ42 production could be potentially developed by selectively targeting M2 conformation of γ secretase complex with APP.