Ectodomain shedding generates soluble isoforms of cell-surface proteins, including angiotensin-converting enzyme (ACE). Increasing evidence suggests that the juxtamembrane stalk of ACE, where proteolytic cleavage-release occurs, is not the major site of sheddase recognition. The role of the cytoplasmic domain has not been completely defined. We deleted the cytoplasmic domain of human testis ACE and found that this truncation mutant (ACE-DeltaCYT) was shed constitutively from the surface of transfected CHO-K1 cells. Phorbol ester treatment produced only a slight increase in shedding of ACE-DeltaCYT, unlike the marked stimulation seen with wild-type ACE. However, for both wild-type ACE and ACE-DeltaCYT, shedding was inhibited by the peptide hydroxamate TAPI and the major cleavage site was identical, indicating the involvement of similar or identical sheddases. Cytochalasin D markedly increased the basal shedding of wild-type ACE but had little effect on the shedding of ACE-DeltaCYT. These data suggest that the cytoplasmic domain of ACE interacts with the actin cytoskeleton and that this interaction is a negative regulator of ectodomain shedding.