Presenilins (PSs) are required for Notch signaling in the development of vertebrates and invertebrates. Mutations in human PS1 and PS2 homologs are a cause of familial Alzheimer's disease (AD). The function of the recently identified ancient family of IMPAS proteins (IMP/SPP/PSH) homologous to PSs is not yet known. We show here that, unlike PSs, IMPs (orthologous C. elegans Ce-imp-2 and human hIMP1/SPP) do not promote Notch (C. elegans lin-12,glp-1) proteolysis or signaling. The knock-down of Ce-imp-2 leads to embryonic death and an abnormal molting phenotype in Caenorhabditis elegans. The molting defect induced by Ce-imp-2 deficiency was mimicked by depleting cholesterol or disrupting Ce-lrp-1 and suppressed, in part, by expression of the Ce-lrp-1 derivate. C. elegans lrp-1 is a homolog of mammalian megalin, lipoprotein receptor-related protein (LRP) receptors essential for cholesterol and lipoprotein endocytosis and signaling. These data suggest that IMPs are functionally distinct from related PSs and implicate IMPs as critical regulators of development that may potentially interact with the lipid-lipoprotein receptor-mediated pathway.