The amyloid protein, Aβ, which accumulates in the brains of Alzheimer patients, is derived by proteolysis of the amyloid protein precursor (APP). APP can undergo endoproteolytic processing at three sites, one at the amino terminus of the Aβ domain (β-cleavage), one within the Aβ domain (α- cleavage), and one at the carboxyl terminus of the Aβ domain (γ-cleavage). The enzymes responsible for these activities have not been unambiguously identified. By the use of gene disruption (knockout), we now demonstrate that TACE (tumor necrosis factor α converting enzyme), a member of the ADAM family (a disintegrin and metalloprotease-family) of proteases, plays a central role in regulated α-cleavage of APP. Our data suggest that TACE may be the α-secretase responsible for the majority of regulated α-cleavage in cultured cells. Furthermore, we show that inhibiting this enzyme affects both APP secretion and Aβ formation in cultured cells.