The receptor for parathyroid hormone (PTHR) is a main regulator of calcium homeostasis and bone maintenance. As a member of class B of G protein-coupled receptors, it harbors a large extracellular domain, which is required for ligand binding. Here, we demonstrate that the PTHR extracellular domain is cleaved by a protease belonging to the family of extracellular metalloproteinases. We show that the cleavage takes place in a region of the extracellular domain that belongs to an unstructured loop connecting the ligand-binding parts and that the N-terminal 10-kDa fragment is connected to the receptor core by a disulfide bond. Cleaved receptor revealed reduced protein stability compared with noncleaved receptor, suggesting degradation of the whole receptor. In the presence of the agonistic peptides PTH(1-34), PTH(1-14), or PTH(1-31), the processing of the PTHR extracellular domain was inhibited, and receptor protein levels were stabilized. A processed form of the PTHR was also detected in human kidney. These findings suggest a new model of PTHR processing and regulation of its stability.