CXC chemokine ligand (CXCL) 16 and scavenger receptor for phosphatidylserine and oxidized low-density lipoprotein were independently identified as a chemokine and a scavenger receptor, respectively, but have since been shown to be identical. CXCL16 is synthesized as a transmembrane protein with its chemokine domain at the end of a mucin-rich stalk. When expressed at the cell surface, CXCL16 functions as a scavenger receptor, binding and internalizing oxidized low-density lipoprotein and bacteria. As a soluble form, CXCL16 is a chemoattractant for activated CD4+ and CD8+ T cells through binding its receptor, CXCR6. In this study, we examined the mechanisms that regulate the conversion between these two functionally distinct forms of CXCL16. We demonstrate that murine CXCL16 is synthesized as an intracellular precursor that is rapidly transported to the cell surface where it undergoes metalloproteinase-dependent cleavage, causing the release of a fragment that constitutes the majority of the CXCL16 extracellular domain. Using a novel retroviral system for the generation of short interfering RNAs, we show that knockdown of a disintegrin and metalloproteinase (ADAM) family protease ADAM10 decreases this constitutive shedding of CXCL16. Furthermore, we show that overexpression of ADAM10 increases CXCL16 shedding, whereas overexpression of a dominant-negative form of ADAM10 lowers shedding of CXCL16 in a similar manner to short interfering RNAs. Through the modulation of ADAM10 function, we demonstrate that ADAM10-mediated constitutive shedding is a key regulator of CXCL16 cell surface expression. The identification of ADAM10 as a major protease responsible for the conversion of CXCL16 from a membrane-bound scavenger receptor to a soluble chemoattractant will provide new information for understanding the physiological function of this molecule.