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Leucine-rich repeats and immunoglobulin-like domains 1 (LRIG1) is a recently discovered negative regulator of growth factor signaling. The LRIG1 integral membrane protein has been demonstrated to regulate various oncogenic receptor tyrosine kinases, including epidermal growth factor (EGF) receptor (EGFR), by cell-autonomous mechanisms. Here, we investigated whether LRIG1 ectodomains were shed, and if LRIG1 could regulate cell proliferation and EGF signaling in a paracrine manner. Cells constitutively shed LRIG1 ectodomains in vitro, and shedding was modulated by known regulators of metalloproteases, including the ADAM17 specific inhibitor TAPI-2. Furthermore, shedding was enhanced by ectopic expression of Adam17. LRIG1 ectodomains appeared to be shed in vivo, as well, as demonstrated by immunoblotting of mouse and human tissue lysates. Ectopic expression of LRIG1 in lymphocytes suppressed EGF signaling in co-cultured fibroblastoid cells, demonstrating that shed LRIG1 ectodomains can function in a paracrine fashion. Purified LRIG1 ectodomains suppressed EGF signaling without any apparent downregulation of EGFR levels. Taken together, the results show that the LRIG1 ectodomain can be proteolytically shed and can function as a non-cell-autonomous regulator of growth factor signaling. Thus, LRIG1 or its ectodomain could have therapeutic potential in the treatment of growth factor receptor-dependent cancers.