Disclosed, as a .gamma.-secretase inhibitor, is a compound consisting of an amino acid sequence which consists of at least three consecutive amino acids of the amino acid sequence Val-Val-Ile-Ala-Thr-Val-Ile-Val-Ile-Thr-Leu-Val-Met-Leu-Lys-Lys-Lys including Leu at position 11, wherein, between the Leu and one or both amino acids located immediately before or after it, the peptide bond, --CO--NH--, is replaced with a hydroxyethylene group, --CHOH--CH.sub.2--, wherein the N terminus has an alkyloxycarbonyl group based on C1-10 alkyl that may carry phenyl or naphthyl as a substituent group, wherein the C terminus is converted to alkyl ester or alkyl amide based on C1-10 alkyl that may carry phenyl or naphthyl as a substituent group, and wherein the hydrogen atom of the hydroxyl group of the Thr at position 10 may be replaced with a C1-4 hydrophobic group or a Z group, or a pharmaceutically acceptable salt thereof.