Interferon-gamma (IFN-γ) is a pleiotropic cytokine that exerts anti-tumor and anti-osteoclastogenic effects. Although transcriptional and post-transcriptional regulation of IFN-γ is well understood, subsequent modifications of secreted IFN-γ are not fully elucidated. Previous research indicates that some cancer cells escape immune surveillance and metastasize into bone tissue by inducing osteoclastic bone resorption. Peptidases of the a-disintegrin and metalloproteinase (ADAM) family are implicated in cancer cell proliferation and tumor progression. We hypothesized that the ADAM enzymes expressed by cancer cells degrades IFN-γ and attenuates IFN-γ-mediated anti-tumorigenic and anti-osteoclastogenic effects. Recombinant ADAM17 degraded IFN-γ into small fragments. The addition of ADAM17 to the culture supernatant of stimulated mouse splenocytes decreased IFN-γ concentration. However, ADAM17 inhibition in the stimulated mouse T-cells prevented IFN-γ degradation. ADAM17-expressing human breast cancer cell lines MCF-7 and MDA-MB-453 also degraded recombinant IFN-γ, but this was attenuated by ADAM17 inhibition. Degraded IFN-γ lost the functionality including the inhibititory effect on osteoclastogenesis. This is the first study to demonstrate the extracellular proteolytic degradation of IFN-γ by ADAM17. These results suggest that ADAM17-mediated degradation of IFN-γ may block the anti-tumorigenic and anti-osteoclastogenic effects of IFN-γ. ADAM17 inhibition may be useful for the treatment of attenuated cancer immune surveillance and/or bone metastases.