The extracellular domains of several integral membrane proteins are released from the cell surface by a group of enzymes known as “sheddases” through a process called “ectodomain shedding”. Because many transmembrane growth and differentiation factors, including members of the epidermal growth factor (EGF) family that play a crucial role in development, require ectodomain shedding for proper action in vivo, proteolysis is now viewed as a regulatory mechanism in the developing embryos. Two recent reports by Zhao et al. provide evidence for (...) the role of cell surface proteolysis by an ADAM (a disintegrin and metalloprotease) in the development of murine lung.(1,2) Inhibition of tumor necrosis factor‐α converting enzyme (TACE, ADAM17) by the hydroxamic acid‐based metalloprotease inhibitor (TAPI), (1) or a targeted mutation in Zn2+‐binding domain of TACE, (2) disrupts two essential epithelial functions in lung development: branching morphogenesis and cytodifferentiation. Evidence for the role of ADAMs as sheddases in development and growth factor signaling is discussed. BioEssays 24:8–12, 2002. © 2002 John Wiley & Sons, Inc. (shrink)