Human cell‐surface protein CD46 protects cells from complement damage, regulates immune functions through signaling and acts as a receptor for certain pathogenic microbes. Multiple molecular weight isoforms of membrane bound CD46 are produced by alternative splicing of the CD46 mRNA in an area coding for the serine/threonine/proline‐rich region or for the cytoplasmic tail. We demonstrate that CD46 becomes proteolytically modified on cell membranes. We observed that tumor cells liberated intact 60–65 kDa forms of CD46 into the cell culture medium on the surface of vesicles with a diameter of 200 nm. Furthermore, soluble CD46 (55–60 kDa) containing the glycosylated STP‐region but lacking the hydrophobic transmembrane sequence and cytoplasmic domains was released from tumor cell membranes. The use of selective inhibitors indicated that CD46 release is due to specific cleavage by a metalloproteinase. Exposure of the cells to hydrogen peroxide (H₂O₂) or their detachment from the pericellular matrix increased the shedding of soluble CD46. Both vesicular and soluble forms of CD46 remained functional and promoted C3b cleavage by factor I. The results show that the functional activity of CD46 is not restricted to the tumor cell membranes but can be liberated in vesicles and by a metalloproteinase.