Recent advances in neuroscience techniques for analyzing synaptic functions, have revealed that even in a fully developed nervous system, dynamic structural changes in synapses can modify a variety of interactions between the presynaptic and postsynaptic neuron. Accumulating evidence suggests that extracellular proteases are involved in the structural modification of synapses through various pathways, including proteolytic cleavage at specific amino acid residues of the extracellular matrix proteins, cell adhesion molecules, and neurotrophic factors. Limited proteolysis induces changes in the properties of substrate proteins or releases functional domains (such as ligands) of the substrate proteins, which activate a signal transduction cascade, and hence could serve to initiate a variety of physiological functions. Such morphological and functional synaptic plasticity might underlie cognitive processes, including learning and memory in animals and humans. Here, we review potential molecular mechanisms of cognition-related focal proteolysis in the hippocampus. In addition, we developed a novel screening method to identify the physiological substrate for proteases.