Syndecans are cell surface proteoglycans that bind and modulate various proinflammatory mediators and can be proteolytically shed from the cell surface. Within the lung, syndecan-1 and -4 are expressed as transmembrane proteins on epithelial cells and released in the bronchoalveolar fluid during inflammation. We here characterize the mechanism leading to the generation of soluble syndecan-1 and -4 in cultured epithelial cells and murine lung tissue. We show that the bladder carcinoma epithelial cell line ECV304, the lung epithelial cell line A459 and primary alveolar epithelial cells express and constitutively release syndecan-1 and -4. This release involves the activity of the disintegrin-like metalloproteinase ADAM17 as demonstrated by use of specific inhibitors and lentivirally transduced shRNA. Stimulation of epithelial cells with PMA, thrombin, or proinflammatory cytokines (TNFalpha/IFNgamma) led to the down-regulation of surface-expressed syndecan-1 and -4, which was associated with a significant increase of soluble syndecans and cell-associated cleavage fragments. The enhanced syndecan release was not related to gene induction of syndecans or ADAM17, but rather due to increased ADAM17 activity. Soluble syndecan-1 and -4 were also released into the bronchoalveolar fluid of mice. Treatment with TNFalpha/IFNgamma increased ADAM17 activity and syndecan release in murine lungs. Both constitutive and induced syndecan shedding was prevented by the ADAM17 inhibitor. ADAM17 may therefore be an important regulator of syndecan functions on inflamed lung epithelium.