Protein ectodomain shedding is crucial for cell–cell interactions because it controls the bioavailability of soluble tumor necrosis factor-α (TNFα) and ligands of the epidermal growth factor (EGF) receptor, and the release of many other membrane proteins. Various stimuli can rapidly trigger ectodomain shedding, yet much remains to be learned about the identity of the enzymes that respond to these stimuli and the mechanisms underlying their activation. Here, we demonstrate that the membrane-anchored metalloproteinase ADAM17, but not ADAM10, is the sheddase that rapidly responds to the physiological signaling pathways stimulated by thrombin, EGF, lysophosphatidic acid and TNFα. Stimulation of ADAM17 is swift and quickly reversible, and does not depend on removal of its inhibitory pro-domain by pro-protein convertases, or on dissociation of an endogenous inhibitor, TIMP3. Moreover, activation of ADAM17 by physiological stimuli requires its transmembrane domain, but not its cytoplasmic domain, arguing against inside–out signaling via cytoplasmic phosphorylation as the underlying mechanism. Finally, experiments with the tight binding hydroxamate inhibitor DPC333, used here to probe the accessibility of the active site of ADAM17, demonstrate that this inhibitor can quickly bind to ADAM17 in stimulated, but not quiescent cells. These findings support the concept that activation of ADAM17 involves a rapid and reversible exposure of its catalytic site.