Axl receptor tyrosine kinase exists as a transmembrane protein and as a soluble molecule. We show that constitutive and phorbol 12-myristate 13-acetate-induced generation of soluble Axl (sAxl) involves the activity of disintegrin-like metalloproteinase 10 (ADAM10). Spontaneous and inducible Axl cleavage was inhibited by the broad-spectrum metalloproteinase inhibitor GM6001 and by hydroxamate GW280264X, which is capable of blocking ADAM10 and ADAM17. Furthermore, murine fibroblasts deficient in ADAM10 expression exhibited a significant reduction in constitutive and inducible Axl shedding, whereas reconstitution of ADAM10 restored sAxl production, suggesting that ADAM10-mediated proteolysis constitutes a major mechanism for sAxl generation in mice. Partially overlapping 14-amino-acid stretch deletions in the membrane-proximal region of Axl dramatically affected sAxl generation, indicating that these regions are involved in regulating the access of the protease to the cleavage site. Importantly, relatively high circulating levels of sAxl are present in mouse sera in a heterocomplex with Axl ligand Gas6. Conversely, two other family members, Tyro3 and Mer, were not detected in mouse sera and conditioned medium. sAxl is constitutively released by murine primary cells such as dendritic and transformed cell lines. Upon immobilization, sAxl promoted cell migration and induced the phosphorylation of Axl and phosphatidylinositol 3-kinase. Thus, ADAM10-mediated generation of sAxl might play an important role in diverse biological processes.