β-Site APP-cleaving enzyme 1 (BACE1) inhibition is considered one of the most promising therapeutic strategies for Alzheimer's disease, but current BACE1 inhibitors also block BACE2. As the localization and function of BACE2 in the brain remain unknown, it is difficult to predict whether relevant side effects can be caused by off-target inhibition of BACE2 and whether it is important to generate BACE1-specific inhibitors. Here, we show that BACE2 is expressed in discrete subsets of neurons and glia throughout the adult mouse brain. We uncover four new substrates processed by BACE2 in cultured glia: vascular cell adhesion molecule 1, delta and notch-like epidermal growth factor-related receptor, fibroblast growth factor receptor 1, and plexin domain containing 2. Although these substrates were not prominently cleaved by BACE2 in healthy adult mice, proinflammatory TNF induced a drastic increase in BACE2-mediated shedding of vascular cell adhesion molecule 1 in CSF. Thus, although under steady-state conditions the effect of BACE2 cross-inhibition by BACE1-directed inhibitors is rather subtle, it is important to consider that side effects might become apparent under physiopathological conditions that induce TNF expression