AbstractAngiotensin converting enzyme 2 (ACE2) is a key regulator of the renin-angiotensin system, but also the functional receptor of the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). Based on structural similarity with other γ-secretase (γS) targets, we hypothesized that ACE2 may be affected by γS proteolytic activity. We found that after ectodomain shedding, ACE2 is targeted for intramembrane proteolysis by γS, releasing a soluble ACE2 C-terminal fragment. Consistently, chemical or genetic inhibition of γS results in the accumulation of a membrane-bound fragment of ectodomain-deficient ACE2. Although chemical inhibition of γS does not alter SARS-CoV-2 cell entry, these data point to a novel pathway for cellular ACE2 trafficking.