Differential expression of extracellular proteases and endogenous protease inhibitors has been associated with distinct molecular subtypes of breast cancer. However, due to the tight post-translational regulation of protease activity, protease expression-level data alone are not sufficient to understand the role of proteases in malignant transformation. Therefore, we hypothesized that global profiles of extracellular protease activity could more completely reflect differences observed at the transcriptional level in breast cancer and that subtype-associated protease activity may be leveraged to identify specific proteases that play a functional role in cancer signaling. Here, we used a global peptide library-based approach to profile the activities of proteases within distinct breast cancer subtypes. Analysis of 3651 total peptide cleavages from a panel of well-characterized breast cancer cell lines demonstrated differences in proteolytic signatures between cell lines. Cell line clustering based on protease cleavages within the peptide library expanded upon the expected classification derived from transcriptional profiling. An isogenic cell line model developed to further interrogate proteolysis in the HER2 subtype revealed a proteolytic signature consistent with activation of TGF-β signaling. Specifically, we determined that a metalloprotease involved in TGF-β signaling, BMP1, was upregulated at both the protein (2-fold, P = 0.001) and activity (P = 0.0599) levels. Inhibition of BMP1 and HER2 suppressed invasion of HER2-expressing cells by 35% (P < 0.0001), compared to 15% (P = 0.0086) observed in cells where only HER2 was inhibited. In summary, through global identification of extracellular proteolysis in breast cancer cell lines, we demonstrate subtype-specific differences in protease activity and elucidate proteolysis associated with HER2-mediated signaling.