Many structurally and functionally diverse membrane proteins are solubilized by a specific proteolytic cleavage in the stalk sequence adjacent to the membrane anchor, with release of the extracellular domain. Examples are the amyloid precursor protein, membrane-bound growth factors, and angiotensin-converting enzyme (ACE). The identities and characteristics of the responsible proteases remain elusive. We have studied this process in Chinese hamster ovary (CHO) cells stably expressing wild-type ACE (WT-ACE; human testis isozyme) or one of four juxtamembrane (stalk) mutants containing either deletions of 17, 24, and 47 residues (ACE-JM delta 17, -JM delta 24, and -JM delta 47, respectively) or a substitution of 26 stalk residues with a 20-residue sequence from the stalk of the low-density lipoprotein receptor (ACE-JMLDL). The C termini of released, soluble WT-ACE and ACE-JM delta 17 and -JMLDL were determined by MALDI-TOF mass spectrometry analyses of C-terminal peptides generated by CNBr cleavage. Observed masses of 4264 (WT-ACE) and 4269 (ACE-JM delta 17) are in good agreement with an expected mass of 4262 for the C-terminal CNBr peptide ending at Arg-627, indicating cleavage at the Arg-627/Ser-628 bond in both WT-ACE and ACE-JM delta 17, at distances of 24 and 10 residues from the membrane, respectively. Data for ACE-JM delta 24 are also consistent with cleavage at or near Arg-627. For ACE-JMLDL, in which the native cleavage site is absent, observed masses of 4372 and 4542 are in close agreement with expected masses of 4371 and 4542 for peptides ending at Ala-628 and Gly-630, respectively, indicating cleavages at 17 or 15 residues from the membrane. These data indicate that the membrane-protein-solubilizing protease (MPSP) in CHO cells is not constrained by a particular cleavage site motif or by a specific distance from the membrane but instead may position itself with respect to the putative proximal, folded extracellular domain adjacent to the stalk. Nevertheless, cleavage at a distance of 10 residues from the membrane is more favorable, as ACE-JM delta 17 is cleaved 12-fold faster than WT-ACE. In contrast, ACE-JM delta 24 is released 17-fold slower, suggesting that a minimum distance from the membrane must be preserved. This is supported by results with the ACE-JM delta 47 mutant, which is membrane-bound but not cleaved, likely because the entire stalk has been deleted. Finally, soluble full-length (anchor-plus) WT-ACE is not cleaved when incubated with various CHO cell fractions or intact CHO cells. On the basis of these and other data, we propose that the CHO cell MPSP that solubilizes ACE (1) only cleaves proteins embedded in a membrane; (2) requires an accessible stalk and cleaves at a minimum distance from both the membrane and proximal extracellular domain; (3) positions itself primarily with respect to the proximal extracellular domain; and (4) may have a weak preference for cleavage at Arg/Lys-X bonds.