Msb2 is a sensor protein in the plasma membrane of fungi. In the human fungal pathogen C. albicans Msb2 signals via the Cek1 MAP kinase pathway to maintain cell wall integrity and allow filamentous growth. Msb2 doubly epitope-tagged in its large extracellular and small cytoplasmic domain was efficiently cleaved during liquid and surface growth and the extracellular domain was almost quantitatively released into the growth medium. Msb2 cleavage was independent of proteases Sap9, Sap10 and Kex2. Secreted Msb2 was highly O-glycosylated by protein mannosyltransferases including Pmt1 resulting in an apparent molecular mass of >400 kDa. Deletion analyses revealed that the transmembrane region is required for Msb2 function, while the large N-terminal and the small cytoplasmic region function to downregulate Msb2 signaling or, respectively, allow its induction by tunicamycin. Purified extracellular Msb2 domain protected fungal and bacterial cells effectively from antimicrobial peptides (AMPs) histatin-5 and LL-37. AMP inactivation was not due to degradation but depended on the quantity and length of the Msb2 glycofragment. C. albicans msb2 mutants were supersensitive to LL-37 but not histatin-5, suggesting that secreted rather than cell-associated Msb2 determines AMP protection. Thus, in addition to its sensor function Msb2 has a second activity because shedding of its glycofragment generates AMP quorum resistance.