The low affinity IgE receptor, FcepsilonRII (CD23), is both a positive and negative regulator of IgE synthesis. The proteinase activity that converts the membrane-bound form of CD23 into a soluble species (sCD23) is an important regulator of the function of CD23 and may be an important therapeutic target for the control of allergy and inflammation. We have characterized the catalytic activity of ADAM (a disintegrin and metalloproteinase) 10 toward human CD23. We found that ADAM10 efficiently catalyzes the cleavage of peptides derived from two distinct cleavage sites in the CD23 backbone. Tissue inhibitors of metalloproteinases and a specific prodomain-based inhibitor of ADAM10 perturb the release of endogenously produced CD23 from human leukemia cell lines as well as primary cultures of human B-cells. Expression of a mutant metalloproteinase-deficient construct of ADAM10 partially inhibited the production of sCD23. Similarly, small inhibitory RNA knockdown of ADAM10 partially inhibited CD23 release and resulted in the accumulation of the membrane-bound form of CD23 on the cells. ADAM10 contributes to CD23 shedding and thus could be considered a potential therapeutic target for the treatment of allergic disease.