Torsin ATPases are the only representatives of the AAA+ ATPase family that reside in the lumen of the endoplasmic reticulum (ER) and nuclear envelope. Two of these, TorsinA and TorsinB, are anchored to the ER membrane by virtue of an N-terminal hydrophobic domain. Here we demonstrate that the imposition of ER stress leads to a proteolytic cleavage event that selectively removes the hydrophobic domain from the AAA+ domain of TorsinA, which retains catalytic activity. Both the pharmacological inhibition profile and the identified cleavage site between two juxtaposed cysteine residues are distinct from those of presently known proteases, suggesting that a hitherto uncharacterized, membrane-associated protease accounts for TorsinA processing. This processing occurs not only in stress-exposed cell lines but also in primary cells from distinct organisms including stimulated B cells, indicating that Torsin conversion in response to physiologically relevant stimuli is an evolutionarily conserved process. By establishing 5-nitroisatin as a cell-permeable inhibitor for Torsin processing, we provide the methodological framework for interfering with Torsin processing in a wide range of primary cells without the need for genetic manipulation.