BACE1 is a membrane-bound aspartic protease that cleaves the amyloid precursor protein (APP) at the beta-secretase site, a critical step in the Alzheimer disease pathogenesis. We previously found that BACE1 also cleaved a membrane-bound sialyltransferase, ST6Gal I. By BACE1 overexpression in COS cells, the secretion of ST6Gal I markedly increased, and the amino terminus of the secreted ST6Gal I started at Glu(41). Here we report that BACE1-Fc chimera protein cleaved the A-ST6Gal I fusion protein, or ST6Gal I-derived peptide, between Leu(37) and Gln(38), suggesting that an initial cleavage product by BACE1 was three amino acids longer than the secreted ST6Gal I. The three amino acids, Gln(38)-Ala(39)-Lys(40), were found to be truncated by exopeptidase activity, which was detected in detergent extracts of Golgi-derived membrane fraction. These results suggest that ST6Gal I is cleaved initially between Leu(37) and Gln(38) by BACE1, and then the three-amino acid sequence at the NH(2) terminus is removed by exopeptidase(s) before secretion from the cells.