Tumor cells release NKG2D ligands to evade NKG2D-mediated immune surveillance. The purpose of our investigation was to explore the cellular mechanisms of release used by various members of the ULBP family. Using biochemical and cellular approaches in both transfectant systems and tumor cell lines, this paper shows that ULBP1, ULBP2, and ULBP3 are released from cells with different kinetics and by distinct mechanisms. Whereas ULBP2 is mainly shed by metalloproteases, ULBP3 is abundantly released as part of membrane vesicles known as exosomes. Interestingly, exosomal ULBP3 protein is much more potent for down-modulation of the NKG2D receptor than soluble ULBP2 protein. This is the first report showing functionally relevant differences in the biochemistry of the three members of the ULBP family and confirms that in depth study of the biochemical features of individual NKG2D ligands will be necessary to understand and manipulate the biology of these proteins for therapy.