We report on the design of benzodiazepinones as peptidomimetics at the carboxy terminus of hydroxyamides. Structure-activity relationships of diazepinones were investigated and orally active gamma-secretase inhibitors were synthesized. Active metabolites contributing to Abeta reduction were identified by analysis of plasma samples from Tg2576 mice. In particular, (S)-2-((S)-2-(3,5-difluorophenyl)-2-hydroxyacetamido)-N-((S,Z)-3-methyl-4-oxo-4,5-dihydro-3H-benzo[d][1,2]diazepin-5-yl)propanamide (BMS-433796) was identified with an acceptable pharmacodynamic and pharmacokinetic profile. Chronic dosing of BMS-433796 in Tg2576 mice suggested a narrow therapeutic window and Notch-mediated toxicity at higher doses.