As a type II transmembrane protein in basal keratinocytes, collagen XVII provides stable adhesion between epidermis and dermis in the skin. Its ectodomain can be shed from the cell surface, and autoantibodies in certain blistering diseases preferentially recognize the shed form. Major epitopes of collagen XVII are clustered within the juxtamembranous noncollagenous 16th A domain, and ectodomain shedding occurs within this region, suggesting that cleavage generates neoepitopes. However, the candidate cleavage sites have been controversial, and the mechanism of neoepitope generation is unclear. In this study, we investigated cleavage sites in the noncollagenous 16th A domain to understand the generation of neoepitopes and their pathological role. Polyclonal Abs recognizing the stretch Leu(524)-Gly(532) preferentially reacted with the shed ectodomain, but not with the full-length form, indicating that a neoepitope was localized at this site. The neoepitope-specific Ab fixed complement and induced granulocyte-dependent dermal-epidermal separation in cryosections of normal human skin. The physiological cleavage sites were identified using mass spectrometry. N termini were found at Asp(514), Leu(524), Glu(525), and Gly(526), among which Asp(514) and Glu(525) were blocked by acetylation and pyroglutaminate. In silico prediction of B cell epitopes indicated that the antigenicity of the Leu(524)-Gly(532) region increased substantially after shedding, regardless of the cleavage sites. Correspondingly, neoepitopes were found in the skin and blister fluids of patients with bullous pemphigoid, and bullous pemphigoid sera reacted with the peptide Leu(524)-Gly(532). Taken together, these data demonstrate that physiological shedding of collagen XVII generates neoepitopes, which may serve as a target of blister-inducing autoantibodies.