We report the cloning of a gene, S2P, that encodes a putative metalloprotease required for intramembrane proteolysis of sterol-regulatory element–binding proteins (SREBPs) at Site-2. SREBPs are membrane-bound transcription factors that activate genes regulating cholesterol metabolism. The active NH₂-terminal domains of SREBPs are released from membranes by sequential cleavage at two sites: Site-1, within the lumen of the endoplasmic reticulum; and Site-2, within a transmembrane segment. The human S2P gene was cloned by complementation of mutant CHO cells that cannot cleave SREBPs at Site-2 and are cholesterol auxotrophs. S2P defines a new family of polytopic membrane proteins that contain an HE XX H sequence characteristic of zinc metalloproteases. Mutation of the putative zinc-binding residues abolishes S2P activity. S2P encodes an unusual metalloprotease that cleaves proteins within transmembrane segments.