Shedding of cell surface molecules, including growth factor receptors, provides a mechanism by which cells regulate signal transduction events. Here we show that platelet-endothelial cell adhesion molecule (PECAM)-1 is shed from the endothelial cell surface during apoptosis and accumulates in the culture medium as a approximately 100 kDa soluble protein. The cleavage mediating the shedding is matrix metalloproteinase (MMP) dependent, as GM6001, a broad-spectrum MMP inhibitor, inhibits PECAM-1 accumulation in the culture medium in a dose-responsive manner. In addition to the 100 kDa soluble fragment, PECAM-1 cleavage generates the formation of a truncated (Tr.) approximately 28 kDa molecule, composed of the transmembrane and the cytoplasmic PECAM-1 domains. Transfections of the full-length (Fl) and the Tr. PECAM-1 gene constructs into endothelial and nonendothelial cells were performed. We found 1) significantly more gamma-catenin and SHP-2 bound to the truncated than to the full-length PECAM-1; 2) stable expression of the truncated PECAM-1 in SW480 colon carcinoma cells resulted in a dramatic decrease in cell proliferation, whereas expression of comparable levels of the full-length PECAM-1 had no effect; 3) the decrease observed in cell proliferation is due, in part, to an increase in programmed cell death (apoptosis) and correlated with continuous caspase 8 cleavage and p38/JNK phosphorylation. These results support the intimate involvement of PECAM-1 in signal transduction cascades and also suggest that caspase substrates (e.g., PECAM-1) may possess distinct and unique functions on cleavage.