The tumor necrosis factor-alpha (TNF) converting enzyme (ADAM17) is a metalloprotease-disintegrin responsible for the cleavage of several biologically active transmembrane proteins. However, the substrate specificity of ADAM17 and the regulation of its shedding activity are still poorly understood. Here, we report that during its transport through the Golgi apparatus, ADAM17 is included in cholesterol-rich membrane microdomains (lipid rafts) where its prodomain is cleaved by furin. Consequently, ADAM17 shedding activity is sequestered in lipid rafts, which is confirmed by the fact that metalloproteinase inhibition increases the proportion of ADAM17 substrates (TNF and its receptors TNFR1 and TNFR2) in lipid rafts. Membrane cholesterol depletion increases the ADAM17-dependent shedding of these substrates demonstrating the importance of lipid rafts in the control of this process. Furthermore, ADAM17 substrates are present in different proportions in lipid rafts, suggesting that the entry of each of these substrates in these particular membrane microdomains is specifically regulated. Our data support the idea that one of the mechanisms regulating ADAM17 substrate cleavage involves protein partitioning in lipid rafts.