Both germinal and somatic isoforms of ACE are type I ectoproteins expressed on the cell surface from where the enzymatically active ectodomains are released to circulation by a regulated cleavage-secretion process. Our previous studies have shown that ACE-secretase activity is regulated by the ACE distal ectodomain and not by sequences at or around the cleavage site. In the current study we have identified that the ACE residues encompassing 343 to 655 of the germinal form are needed for its cleavage-secretion. To narrow down this region further, we have examined the cleavage-secretion of ACE-CD4 chimeric proteins in mammalian cells and Pichia pastoris. These experiments identified five residues (HGEKL) in the ACE region of the chimeric proteins that were essential for their cleavage-secretion. When the corresponding residues were substituted by alanine in native germinal and somatic ACE, the mutant proteins were not cleaved, although they were displayed on the cell surface and enzymatically active. These results demonstrated that a small region in the ectodomain of ACE is required for its cleavage at the juxtamembrane domain. This conclusion was further supported by our observation that secreted ACE inhibited cell-bound ACE cleavage-secretion, although the secreted form did not contain the cleavage site.