Heme oxygenase-1 (HO-1) is a heme-degrading enzyme anchored in the endoplasmic reticulum by a carboxyl-terminal transmembrane segment (TMS). HO-1 is highly expressed in various cancers and its nuclear localization is associated with the progression of some cancers. Nevertheless, the mechanism underlying HO-1 nuclear translocation and its pathological significance remain elusive. Here we show that the signal peptide peptidase (SPP) catalyzes the intramembrane cleavage of HO-1. Coexpression of HO-1 with wild-type SPP, but not a dominant-negative SPP, promoted the nuclear localization of HO-1 in cells. Mass spectrometry analysis of cytosolic HO-1 isolated from HeLa cells overexpressing HO-1 and SPP revealed two adjacent intramembrane cleavage sites located after S275 and F276 within the TMS. Mutations of S275F276 to A275L276 significantly hindered SPP-mediated HO-1 cleavage and nuclear localization. Nuclear HO-1 was detected in A549 and DU145 cancer cell lines expressing high levels of endogenous HO-1 and SPP. SPP knockdown or inhibition significantly reduced nuclear HO-1 localization in A549 and DU145 cells. The positive nuclear HO-1 stain was also evident in lung cancer tissues expressing high levels of HO-1 and SPP. Overexpression of a truncated HO-1 (t-HO-1) lacking the TMS in HeLa and H1299 cells promoted cell proliferation and migration/invasion. The effect of t-HO-1 was not affected by a mutation in the catalytic site. However, blockade of t-HO-1 nuclear localization abolished t-HO-1-mediated effect. The tumorigenic effect of t-HO-1 was also demonstrated in the mouse model. These findings disclose that SPP-mediated intramembrane cleavage of HO-1 promotes HO-1 nuclear localization and cancer progression independent of HO-1 enzymatic activity.