Collagen XVII/BP180, an epithelial adhesion molecule, belongs to the group of collagenous transmembrane proteins, which are characterized by ectodomain shedding. We recently showed that ADAMs can cleave collagen XVII, but also that furin participates in this process (Franzke, C. W., Tasanen, K., Schäcke, H., Zhou, Z., Tryggvason, K., Mauch, C., Zigrino, P., Sunnarborg, S., Lee, D. C., Fahrenholz, F., and Bruckner-Tuderman, L. (2002) EMBO J. 21, 5026-5035). To define the cleavage region in the juxtamembranous NC16A linker domain and assess its structure and requirements for shedding, we constructed deletion mutants of the NC16A domain, expressed them in COS-7 cells, and analyzed their structural integrity and shedding behavior. A mutant lacking the furin consensus sequence was shed in a normal manner, demonstrating that furin does not cleave collagen XVII but rather activates ADAMs (a disintegrin and metalloproteinase). Large deletions of the NC16A domain prevented shedding, and analysis of defined smaller deletions pointed to the stretch of amino acid residues 528-547 as important for sheddase recognition and cleavage. Secondary protein structure predictions showed that deletion of this stretch resulted in an NC16A domain with a positive net charge and an amphipathic alpha-helix, which can cause conformational changes in the collagen XVII homotrimer. Assessment of triple-helix folding of the mutants revealed a lower thermal stability of all non-shed variants than of wild-type collagen XVII or the shed mutants. In contrast, deletion of the putative nucleation site for triple-helix folding of collagenous transmembrane proteins did not affect folding of collagen XVII. The data indicate that the conformation of the NC16A domain and steric availability of the cleavage site influence shedding and is important for folding of collagen XVII.