Angiotensin-converting enzyme (ACE), a type I integral membrane protein that plays a major role in vasoactive peptide metabolism, is shed from the plasma membrane by proteolytic cleavage within the juxtamembrane stalk. To investigate whether this shedding is regulated by lateral segregation in cholesterol-rich lipid rafts, Chinese hamster ovary cells and human neuroblastoma SH-SY5Y cells were transfected with either wild-type ACE (WT-ACE) or a construct with a glycosylphosphatidylinositol (GPI) anchor attachment signal replacing the transmembrane and cytosolic domains (GPI-ACE). In both cell types, GPI-ACE, but not WT-ACE, was sequestered in caveolin or flotillin-enriched lipid rafts and was released from the cell surface by treatment with phosphatidylinositol-specific phospholipase C. When cells were treated with activators of the protein kinase C signalling cascade (phorbol myristate acetate or carbachol) the shedding of GPI-ACE was stimulated to a similar extent to that of WT-ACE. The release of WT-ACE and GPI-ACE from the cells was inhibited in an identical manner by a range of hydroxamate-based zinc metalloprotease inhibitors. Disruption of lipid rafts by filipin treatment did not alter the shedding of GPI-ACE, and phorbol ester treatment did not alter the distribution of WT-ACE or GPI-ACE between raft and non-raft membrane compartments. These data clearly show that the protein kinase C-stimulated shedding of ACE does not require the transmembrane or cytosolic regions of the protein, and that sequestration in lipid rafts does not regulate the shedding of the protein.