Missense mutations in the PRESENILIN1 (PSEN1) gene frequently underlie familial Alzheimer’s disease (FAD). Nonsense and most splicing mutations result in the synthesis of truncated peptides, and it has been assumed that truncated PSEN1 protein is functionless so that heterozygotes for these mutations are unaffected. Some FAD mutations affecting PSEN1 mRNA splicing cause loss of exon 8 or 9 sequences while maintaining the reading frame. We attempted to model these exon-loss mutations in zebrafish embryos by injecting morpholino antisense oligonucleotides (morpholinos) directed against splice acceptor sites in zebrafish psen1 transcripts. However, this produced cryptic changes in splicing potentially forming mRNAs encoding truncated presenilin proteins. Aberrant splicing in the region between exons 6 and 8 produces potent dominant negative effects on Psen1 protein activity, including Notch signalling, and causes a hydrocephalus phenotype. Reductions in Psen1 activity feedback positively to increase psen1 transcription through a mechanism apparently independent of γ-secretase. We present evidence that the dominant negative effects are mediated through production of truncated Psen1 peptides that interfere with the normal activity of both Psen1 and Psen2. Mutations causing such truncations would be dominant lethal in embryo development. Somatic cellular changes in ageing cells that interfere with PSEN1 splicing, or otherwise cause protein truncation, might contribute to sporadic Alzheimer’s disease, cancer and other diseases.