Toll-like receptor (TLR) 2, a type I membrane receptor that plays a key role in innate immunity, recognizes conserved molecules in pathogens, and triggering an inflammatory response. It has been associated with inflammatory and autoimmune diseases. Soluble TLR2 (sTLR2) variants have been identified in human body fluids, and the TLR2 ectodomain can negatively regulate TLR2 activation by behaving as a decoy receptor. sTLR2 generation does not involve alternative splicing mechanisms, indicating that this process might involve a post-translational modification of the full-length receptor; however, the specific mechanism has not been studied. Using CD14+ peripheral human monocytes and the THP-1 monocytic leukemia-derived cell line, we confirm that sTLR2 generation increases upon treatment with pro-inflammatory agents and requires a post-translational mechanism. We also find that the constitutive and ligand-induced release of sTLR2 is sensitive to pharmacological metalloproteinase activator and inhibitors leading us to conclude that metalloproteinase TLR2 shedding contributes to soluble receptor production. By expressing human TLR2 in ADAM10- or ADAM17-deficient MEF cells, we find both enzymes to be implicated in TLR2 ectodomain shedding. Moreover, using a deletion mutant of the TLR2 juxtamembrane region, we demonstrate that this domain is required for sTLR2 generation. Functional analysis suggests that sTLR2 generated by metalloproteinase activation inhibitsTLR2-induced cytokine production by this monocytic leukemia-derived cell line. The identification of the mechanisms involved in regulating the availability of soluble TLR2 ectodomain and cell surface receptors may contribute further research on TLR2-mediated processes in innate immunity and inflammatory disorders.