CD16 (Fcγ R type III) is a low‐affinity IgG Fc receptor (R) that exists in two isoforms, a transmembrane FcγRIIIa expressed by NK cells and monocytes, and a phosphatidylinositol‐linked FcγRIIIb expressed by neutrophils. A soluble form of CD16 (sCD16) circulates in plasma. The cleavage site and the nature of the enzyme(s) involved in production of sCD16 were investigated. Soluble CD16 was purified to apparent homogeneity from human serum by eight steps, including anion exchange and immunoaffinity chromatography. Serum sCD16 was sequenced at both ends, as well as a recombinant form of sCD16 used as control. N‐terminal sequencing demonstrated that serum sCD16 originates from neutrophil FcγRIIIb and C‐terminal sequencing suggested that the cleavage site is between Val 196 and Ser 197, close to the membrane anchor. Addition of a hydroxamate‐based inhibitor of Zn²⁺ metalloproteinases (RU36156) led to a dramatic decrease of sCD16 production by phorbol 12‐myristate 13‐acetate‐activated neutrophils, whereas inhibitors of serine proteinases had no significant effect, showing the metalloproteinase dependence of this cleavage process.