Toll-like receptors (TLRs) 3, 7, and 9 are innate immune receptors that recognize nucleic acids from pathogens in endosomes and initiate signaling transductions that lead to cytokine production. Activation of TLR9 for signaling requires proteolytic processing within the ectodomain by endosome-associated proteases. Whether TLR3 requires similar proteolytic processing to become competent for signaling remains unclear. Herein we report that human TLR3 is proteolytically processed to form two fragments in endosomes. Unc93b1 is required for processing by transporting TLR3 through the Golgi complex and to the endosomes. Proteolytic cleavage requires the eight-amino acid Loop1 within leucine-rich repeat 12 of the TLR3 ectodomain. Proteolytic cleavage is not required for TLR3 signaling in response to poly(I:C), although processing could modulate the degree of response toward viral double-stranded RNAs, especially in mouse cells. Both the full-length and cleaved fragments of TLR3 can bind poly(I:C) and are present in endosomes. However, although the full-length TLR3 has a half-life in HEK293T cells of 3 h, the cleaved fragments have half-lives in excess of 7 h. Inhibition of TLR3 cleavage by either treatment with cathepsin inhibitor or by a mutation in Loop1 decreased the abundance of TLR3 in endosomes targeted for lysosomal degradation.