Desmosomal cadherins mediate intercellular adhesion and have also been shown to regulate homeostatic signaling in epithelial cells. We have previously reported that select pro-inflammatory cytokines induce Dsg2 ectodomain cleavage and shedding from intestinal epithelial cells (IECs). Dsg2 extracellular cleaved fragments (Dsg2 ECF) function to induce paracrine pro-proliferative signaling in epithelial cells. In this study, we show that exposure of IECs to pro-inflammatory cytokines interferon-gamma (IFN-γ) and tumor necrosis factor-alpha (TNF-α) resulted in Dsg2 intracellular cleavage and generation of a ~55 kDa fragment (Dsg2 ICF). Dsg2 intracellular cleavage is mediated by caspase-8 and occurs prior to Dsg2 extracellular cleavage and the execution of apoptosis. Expression of exogenous Dsg2 ICF in model IECs resulted in increased sensitivity to apoptotic stimuli and apoptosis execution. Additionally, expression of the Dsg2 ICF repressed the anti-apoptotic Bcl-2 family member proteins Bcl-XL and Mcl1. Taken together, our findings identify a novel mechanism by which pro-inflammatory mediators induce modification of Dsg2 to activate apoptosis and eliminate damaged cells, while also promoting release of Dsg2 ECF that promotes proliferation of neighboring cells and epithelial barrier recovery.