Epithin/PRSS14, a type II transmembrane serine protease, is involved in normal epithelial development and tumor progression. Here we report, as an interacting substrate of epithin, a receptor tyrosine kinase Tie2 that is well known for important roles in the vessel stability. Epithin interacts with and degrades the Tie2 extracellular portion that contains the ligand-binding domain. Epithin is located in the neighbor of Tie2-expressing vessels in normal tissue. Furthermore, epithin can cleave and degrade Tie2 not only in the same cell but also from neighboring cells nearby, resulting in the degradation of the Tie2 ectodomain. The remaining Tie2 fragment was highly phosphorylated and was able to recruit a downstream effector, phosphatidylinositol 3-kinase. Knocking down epithin expression using short hairpin RNA in thymoma cell severely impaired the migration through endothelial cells that show the actin rearrangement during the process. The diminution of epithin protein expression in 4T1 breast cancer cells caused the significant decrease in the number of transendothelial migrating cells in vitro as well as in those of metastasizing tumor nodules in vivo, Therefore, we propose that epithin, which regulates endothelial Tie2 functions, plays a critical role in the fine tuning of transendothelial migration for normal and cancer cells.