The type II transmembrane serine protease matriptase is a key regulator of epithelial barriers in skin and intestine. In skin, matriptase acts upstream of the glycosylphosphatidylinositol-anchored serine protease, prostasin, to activate the prostasin zymogen and initiate a proteolytic cascade that is required for stratum corneum barrier functionality. Here, we have investigated the relationship between prostasin and matriptase in intestinal epithelial barrier function. We find that similar to skin, matriptase and prostasin are components of a common intestinal epithelial barrier-forming pathway. Depletion of prostasin by siRNA silencing in Caco-2 intestinal epithelium inhibits barrier development similar to loss of matriptase, and the addition of recombinant prostasin to the basal side of polarized Caco-2 epithelium stimulates barrier forming changes similar to the addition of recombinant matriptase. However, in contrast to the proteolytic cascade in skin, prostasin functions upstream of matriptase to activate the endogenous matriptase zymogen. Prostasin is unable to proteolytically activate the matriptase zymogen directly but induces matriptase activation indirectly. Prostasin requires expression of endogenous matriptase to stimulate barrier formation since matriptase depletion by siRNA silencing abrogates prostasin barrier-forming activity. Active recombinant matriptase, however, does not require the expression of endogenous prostasin for barrier-forming activity. Together, these data show that matriptase and not prostasin is the primary effector protease of tight junction assembly in simple columnar epithelia and further highlight a spatial and tissue-specific aspect of cell surface proteolytic cascades.