Understanding the underlying mechanisms by which a normal cell avoids the oncogenic potential of MUC1 signaling requires further definition of the pathways by which the MUC1 cytoplasmic tail is processed in both normal and tumor-derived cells. In the present study we describe the processing pathway initiated by TACE/ADAM17 cleavage of MUC1. Utilizing the human uterine epithelial cell line, HES, derived from normal endometrium, we show that endogenous full length MUC1 undergoes regulated intramembranous proteolysis mediated by presenillin-dependent gamma-secretase. Cytokine-stimulated HES cells exposed to gamma-secretase inhibitors accumulated a membrane-associated 15 kDa fragment of the MUC1 C-terminal subunit (CTF15). Inhibitors of TACE/ADAM17-mediated shedding inhibited accumulation of MUC1-CTF15 and MUC1 ectodomain release to a similar extent consistent with MUC1-CTF15 being a product of TACE/ADAM17 action. Reduction of catalytically active gamma-secretase complex by nicastrin siRNA treatment also resulted in CTF15 accumulation. Furthermore, mature nicastrin, the substrate receptor for gamma-secretase, co-immunoprecipitated with CTF15 in the presence of gamma-secretase inhibitors indicating the formation of CTF15: nicastrin complexes. MUC1-CTF15 accumulation in response to gamma-secretase inhibition was demonstrated in both normal and tumor-derived cells from humans and mice indicating that this processing pathway exists in many cell contexts. We did not detect products of MUC1 cleavage by gamma-secretase in the presence of various proteasomal inhibitors indicating that subsequent degradation is either non-proteasomal or extremely efficient. We suggest that this efficient pathway attenuates potential signaling mediated by cytoplasmic tail fragments.