Mesothelin is a cell-surface tumor-associated antigen expressed in several human cancers. The limited expression of mesothelin on normal tissues and its high expression in many cancers make it an attractive candidate for targeted therapies using monoclonal antibodies, immunoconjugates, and immunotoxins. Mesothelin is actively shed from the cell surface and is present in the serum of patients with malignant mesothelioma, which could negatively affect the response to these therapies. We have found that mesothelin sheddase activity is mediated by a TNF-α converting enzyme (TACE), a member of the matrix metalloproteinase/a disintegrin and metalloprotease family. We showed that EGF and TIMP-3 act through TACE as endogenous regulators of mesothelin shedding. We also found that reducing shedding significantly improved the in vitro cytotoxicity of immunotoxin SS1P, which targets mesothelin and is currently in clinical trials for the treatment of patients with mesothelioma and lung cancer. Our findings provide a mechanistic understanding of mesothelin shedding and could help improve mesothelin-based targeted therapies. Cancer Res; 71(17); 5915–22. ©2011 AACR.