EphB4, a member of the largest family of receptor tyrosine kinases, is over-expressed in several epithelial cancers including 66% of prostate cancers (PCa), where it promotes tumour angiogenesis and increases cancer cell survival, invasion and migration. Our laboratory has identified 2 sequential protease-mediated cleavage events that liberate fragments of both the extracellular (ECD – 70 kDa) and intracellular (ICD – 50 kDa and 47 kDa) domains of EphB4 in 22Rv1- EphB4 over-expressing cells. The PCa-associated serine protease KLK4 was found to mediate the first cleavage event, releasing the ECD, with the remnant transmembrane fragment (50 kDa) being subsequently cleaved by γ-secretase to release the intracellular 47 kDa ICD fragment. Subcellular fractionation demonstrated that the 47 kDa fragment was present in the nuclear fraction suggesting nuclear translocation of this fragment. Both co-localisation and nuclear transport blockade by treatment with the α-importin inhibitor, ivermectin, demonstrated that nuclear translocation of the ICD was mediated by α-importin. Over-expression of the ICD fragment in PCa cells led to increased cell migration and proliferation as well as a changed cellular morphology. ICD over-expression also led to an increase in mRNA expression of Lef1, a known transcriptional regulator of the androgen receptor in the prostate. These data suggest that proteolytic production of the ICD leads to functional and potentially transcriptional effects in PCa cells and thereby provides the first evidence of novel mechanisms underlying the tumour-promoting effects of this important cancer-associated protein. The production of EphB4 fragments in PCa may be targetable by inhibition of proteolysis and this could be a potential novel avenue for anti-cancer therapies.