The discoidin domain receptor 1 (DDR1) is a receptor tyrosine kinase that is highly expressed in breast carcinoma cells. Upon binding to collagen, DDR1 undergoes autophosphorylation followed by limited proteolysis to generate a tyrosine phosphorylated C-terminal fragment (CTF). Although it was postulated that this fragment is formed as a result of shedding of the N-terminal ectodomain, collagen-dependent release of the DDR1 extracellular domain has not been demonstrated. We now report that, in conjunction with CTF formation, collagen type I stimulates concentration-dependent, saturable shedding of the DDR1 ectodomain from two carcinoma cell lines, and from transfected cells. In contrast, collagen did not promote cleavage of other transmembrane proteins including the amyloid precursor protein (APP), ErbB2, and E-cadherin. Collagen-dependent tyrosine phosphorylation and proteolysis of DDR1 in carcinoma cells were reduced by a pharmacologic Src inhibitor. Moreover, expression of a dominant negative Src mutant protein in human embryonic kidney cells inhibited collagen-dependent phosphorylation and shedding of co-transfected DDR1. The hydroxamate-based metalloproteinase inhibitor TAPI-1 (tumor necrosis factor-α protease inhibitor-1), and tissue inhibitor of metalloproteinase (TIMP)-3, also blocked collagen-evoked DDR1 shedding, but did not reduce levels of the phosphorylated CTF. Neither shedding nor CTF formation were affected by the γ-secretase inhibitor, L-685,458. The results demonstrate that collagen-evoked ectodomain cleavage of DDR1 is mediated in part by Src-dependent activation or recruitment of a matrix-or disintegrin metalloproteinase, and that CTF formation can occur independently of ectodomain shedding. Delayed shedding of the DDR1 ectodomain may represent a mechanism that limits DDR1-dependent cell adhesion and migration on collagen matrices. Keywords zinc-dependent metalloproteinase; amyloid precursor protein; tyrosine phosphorylation; TIMP (tissue inhibitor of metalloproteinase)