Mutations in the presenilin‐1 (PS1) gene cause early onset familial Alzheimer's disease (FAD) by a mechanism believed to involve perturbed endoplasmic reticulum (ER) function and altered proteolytic processing of the amyloid precursor protein. We investigated the molecular mechanisms underlying cell death and ER dysfunction in cultured cells and knock‐in mice expressing FAD PS1 mutations. We report that PS1 mutations cause a marked increase in basal protein levels of the pro‐apoptotic transcription factor Gadd153. PS1 mutations increase Gadd153 protein translation without affecting mRNA levels, while decreasing levels of the anti‐apoptotic protein Bcl‐2. Moreover, an exaggerated Gadd153 response to stress induced by ER stress agents was observed in PS1 mutant cells. Cell death in response to ER stress is enhanced by PS1 mutations, and this endangering effect is attenuated by anti‐sense‐mediated suppression of Gadd153 production. An abnormality in the translational regulation of Gadd153 may sensitize cells to the detrimental effects of ER stress and contribute to the pathogenic actions of PS1 mutations in FAD.