Tumour-necrosis factor-alpha (TNF-alpha) is a cytokine that contributes to a variety of inflammatory disease states. The protein exists as a membrane-bound precursor of relative molecular mass 26K which can be processed by a TNF-alpha-converting enzyme (TACE), to generate secreted 17K mature TNF-alpha. We have purified TACE and cloned its complementary DNA. TACE is a membrane-bound disintegrin metalloproteinase. Structural comparisons with other disintegrin-containing enzymes indicate that TACE is unique, with noteable sequence identity to MADM, an enzyme implicated in myelin degradation, and to KUZ, a Drosophila homologue of MADM important for neuronal development. The expression of recombinant TACE (rTACE) results in the production of functional enzyme that correctly processes precursor TNF-alpha to the mature form. The rTACE provides a readily available source of enzyme to help in the search for new anti-inflammatory agents that target the final processing stage of TNF-alpha production.