The authors show that Arm is cleaved in its amino-terminal region in vivo and that the cleavage can be reproduced in vitro by DrICE (a Drosophila homolog of mammalian caspase-3). Cleavage occurs at the DQVD88 motif, as demonstrated in vivo by the cleavage resistance of Arm with an aspartate (D) to alanine (A) mutation in the DQVD88 motif (ArmD88A). When ArmD88A is overexpressed in Diap1- lacking embryos, E-cadherin and ArmD88A are maintained at the membrane until late apoptosis, whereas endogenous Arm is removed, showing that Arm cleavage is required for the removal of these two junctional components from the membrane.