The thyrotropin (TSH) receptor belongs to a subfamily of G protein-coupled receptors, which also includes luteinizing hormone and follicle-stimulating hormone receptors. The TSH receptor (TSHR) differs from the latter by the presence of an additional specific segment in the C-terminal part of its ectodomain. We show here that this insertion is excised in the majority of receptor molecules. Preparation of specific monoclonal antibodies to this region, microsequencing, enzyme-linked immunosorbent assay, and immunoblot studies have provided insight into the mechanisms of this excision. In the human thyroid gland, N termini of the transmembrane receptor beta subunit were found to be phenylalanine 366 and leucines 370 and 378. In transfected L cells a variety of other more proximal N termini were found, probably corresponding to incomplete excisions. The most extreme N terminus was observed to lie at Ser-314. These observations suggest that after initial cleavage at Ser-314 the inserted fragment of TSHR is progressively clipped out by a series of cleavage reactions progressing up to amino acids 366-378. The impossibility of recovering the excised fragment from purified receptor, cell membranes, or culture medium supports this interpretation. The cleavage enzyme has previously been shown to be inhibited by BB-2116, an inhibitor of matrix metalloproteases. However, we show here that it is unaffected by tissue inhibitors of metalloproteases. The cleavage enzyme is very similar to TACE (tumor necrosis factor alpha-converting enzyme) in both these characteristics. However, incubation of the TSH receptor with the purified recombinant catalytic domain of TACE, co-transfection of cells with TACE and TSHR expression vectors, and the use of mutated Chinese hamster ovary cells in which TACE is inactive suggested that the TSHR cleavage enzyme is different from TACE. TACE and TSHR cleavage enzyme may thus possibly be related but different members of the adamalysin family of metzincin metalloproteases.