Tumour necrosis factor (TNF)-alpha converting enzyme (TACE) releases biologically active, soluble TNF-alpha from transmembrane pro-TNF-alpha and has attracted interest as a specific therapeutic target in inflammatory bowel disease (IBD). Strong immunoreactivity for TACE protein was demonstrated recently in human colonic epithelium, but the function is unknown. We investigated if human colonic epithelial cells express functional TACE activity and how TACE expression is regulated in response to cytokine stimulation. TACE and TNF-alpha mRNA and protein expression were measured in HT-29 and DLD-1 colonic epithelial cells by reverse-transcription polymerase chain reaction, western blotting or enzyme-linked immunosorbent assay. Monocytic THP-1 cells served as positive control. Functional TACE activity was identified and quantified in detergent extracts of cell lines and freshly isolated colonocytes from 14 IBD patients and five controls by a hydrolysis assay using an oligopeptide spanning the cleavage site in pro-TNF-alpha. HT-29 and DLD-1 cells spontaneously expressed TACE mRNA and the active form of TACE protein at levels similar to those of monocytic cells. Functional TACE activity was demonstrated in all cell lines and in cells of controls or IBD patients irrespective of disease activity. TACE mRNA expression and functional activity remained unchanged in cell lines after stimulation with TNF-alpha despite clear induction of TNF-alpha mRNA expression and release of soluble TNF-alpha protein. The release of soluble TNF-alpha protein was almost completely abolished by CH4474, a synthetic TACE inhibitor. We conclude that functional TACE activity is constitutively expressed in human colonic epithelial cells and responsible for processing of the mature, soluble form of TNF-alpha in response to cytokine stimulation.