Neurotrophins are growth factors that promote cell survival, differentiation, and cell death. They are synthesized as proforms that can be cleaved intracellularly to release mature, secreted ligands. Although proneurotrophins have been considered inactive precursors, we show here that the proforms of nerve growth factor (NGF) and the proforms of brain derived neurotrophic factor (BDNF) are secreted and cleaved extracellularly by the serine protease plasmin and by selective matrix metalloproteinases (MMPs). ProNGF is a high-affinity ligand for p75^NTR with high affinity and induced p75^NTR-dependent apoptosis in cultured neurons with minimal activation of TrkA-mediated differentiation or survival. The biological action of neurotrophins is thus regulated by proteolytic cleavage, with proforms preferentially activating p75^NTR to mediate apoptosis and mature forms activating Trk receptors to promote survival.