Ectodomain shedding has emerged as an important regulatory step in the function of transmembrane proteins. Intercellular adhesion molecule-1 (ICAM-1), an adhesion receptor that mediates inflammatory and immune responses, undergoes shedding in the presence of inflammatory mediators and phorbol 12-myristate 13-acetate (PMA). The shedding of ICAM-1 in ICAM-1-transfected 293 cells upon PMA stimulation and in endothelial cells upon tumor necrosis factor-α stimulation was blocked by metalloproteinase inhibitors, whereas serine protease inhibitors were ineffective. p-Aminophenylmercuric acetate, a mercuric compound that is known to activate matrix metalloproteinases, up-regulated ICAM-1 shedding. TIMP-3 (but not TIMP-1 or -2) effectively blocked cleavage. This profile suggests the involvement of the ADAM family of proteases in the cleavage of ICAM-1. The introduction of enzymatically active tumor necrosis factor-α-converting enzyme (TACE) into ICAM-1-expressing cells up-regulated cleavage. Small interfering RNA directed against TACE blocked ICAM-1 cleavage. ICAM-1 transfected into TACE–– fibroblasts did not show increased shedding over constitutive levels in the presence of PMA, whereas cleavage did occur in ICAM-1-transfected TACE++ cells. These results indicate that ICAM-1 shedding is mediated by TACE. Blocking the shedding of ICAM-1 altered the cell adhesive function, as ICAM-1-mediated cell adhesion was up-regulated in the presence of TACE small interfering RNA and TIMP-3, but not TIMP-1. However, cleavage was found to occur at multiple sites within the stalk domain of ICAM-1, and numerous point mutations within the region did not affect cleavage, indicating that TACE-mediated cleavage of ICAM-1 may not be sequence-specific.