The Notch1 receptor is presented at the cell membrane as a heterodimer after constitutive processing by a furin-like convertase. Ligand binding induces the proteolytic release of Notch intracellular domain by a gamma-secretase-like activity. This domain translocates to the nucleus and interacts with the DNA-binding protein CSL, resulting in transcriptional activation of target genes. Here we show that an additional processing event occurs in the extracellular part of the receptor, preceding cleavage by the gamma-secretase-like activity. Purification of the activity accounting for this cleavage in vitro shows that it is due to TACE (TNFalpha-converting enzyme), a member of the ADAM (a disintegrin and metalloprotease domain) family of metalloproteases. Furthermore, experiments carried out on TACE-/- bone marrow-derived monocytic precursor cells suggest that this metalloprotease plays a prominent role in the activation of the Notch pathway.