Generation of the amyloid peptide through proteolytic processing of the amyloid precursor protein by beta- and gamma-secretases is central to the etiology of Alzheimer's disease. beta-secretase, known more widely as the beta-site amyloid precursor protein cleaving enzyme 1 (BACE1), has been identified as a transmembrane aspartic proteinase, and its ectodomain has been reported to be cleaved and secreted from cells in a soluble form. The extracellular domains of many diverse proteins are known to be cleaved and secreted from cells by a process known as ectodomain shedding. Here we confirm that the ectodomain of BACE1 is secreted from cells and that this processing is up-regulated by agents that activate protein kinase C. A metalloproteinase is involved in the cleavage of BACE1 as hydroxamic acid-based metalloproteinase inhibitors abolish the release of shed BACE1. Using potent and selective inhibitors, we demonstrate that ADAM10 is a strong candidate for the BACE1 sheddase. In addition, we show that the BACE1 sheddase is distinct from alpha-secretase and, importantly, that inhibition of BACE1 shedding does not influence amyloid precursor protein processing at the beta-site.