Numerous membrane-bound proteins undergo regulated intramembrane proteolysis. Regulated intramembrane proteolysis is initiated by shedding, and the remaining stubs are further processed by intramembrane-cleaving proteases (I-CLiPs). Neuregulin 1 type III (NRG1 type III) is a major physiological substrate of β-secretase (β-site amyloid precursor protein-cleaving enzyme 1 (BACE1)). BACE1-mediated cleavage is required to allow signaling of NRG1 type III. Because of the hairpin nature of NRG1 type III, two membrane-bound stubs with a type 1 and a type 2 orientation are generated by proteolytic processing. We demonstrate that these stubs are substrates for three I-CLiPs. The type 1-oriented stub is further cleaved by γ-secretase at an ϵ-like site five amino acids N-terminal to the C-terminal membrane anchor and at a γ-like site in the middle of the transmembrane domain. The ϵ-cleavage site is only one amino acid N-terminal to a Val/Leu substitution associated with schizophrenia. The mutation reduces generation of the NRG1 type III β-peptide as well as reverses signaling. Moreover, it affects the cleavage precision of γ-secretase at the γ-site similar to certain Alzheimer disease-associated mutations within the amyloid precursor protein. The type 2-oriented membrane-retained stub of NRG1 type III is further processed by signal peptide peptidase-like proteases SPPL2a and SPPL2b. Expression of catalytically inactive aspartate mutations as well as treatment with 2,2'-(2-oxo-1,3-propanediyl)bis[(phenylmethoxy)carbonyl]-l-leucyl-l-leucinamide ketone inhibits formation of N-terminal intracellular domains and the corresponding secreted C-peptide. Thus, NRG1 type III is the first protein substrate that is not only cleaved by multiple sheddases but is also processed by three different I-CLiPs.