(Hydroxyethyl)urea peptidomimetics are potent inhibitors of gamma-secretase that are accessible in a few synthetic steps. Systematic alteration of P2-P4' revealed that the corresponding S2-S4' active site pockets accommodate a variety of substituents, consistent with the fact that this protease cleaves a variety of single-pass membrane proteins; however, phenylalanine is not well tolerated at P2'. A compound spanning P2-P3' was identified as a low nM inhibitor of gamma-secretase activity both in cells and under cell-free conditions.