Contact-mediated axon repulsion by ephrins raises an unresolved question: these cell surface ligands form a high-affinity multivalent complex with their receptors present on axons, yet rather than being bound, axons can be rapidly repelled. We show here that ephrin-A2 forms a stable complex with the metalloprotease Kuzbanian, involving interactions outside the cleavage region and the protease domain. Eph receptor binding triggered ephrin-A2 cleavage in a localized reaction specific to the cognate ligand. A cleavage-inhibiting mutation in ephrin-A2 delayed axon withdrawal. These studies reveal mechanisms for protease recognition and control of cell surface proteins, and, for ephrin-A2, they may provide a means for efficient axon detachment and termination of signaling.