Proteases are important regulators of pulmonary remodeling and airway inflammation. Recently, we have characterized the enzyme prolyl endopeptidase (PE), a serine peptidase, as a critical protease in the generation of the neutrophil chemoattractant tripeptide Pro-Gly-Pro (PGP) from collagen. However, PE has been characterized as a cytosolic enzyme, and the mechanism mediating PE release extracellularly remains unknown. We examined the role of exosomes derived from airway epithelia as a mechanism for PE release and the potential extracellular signals that regulate the release of these exosomes. We demonstrate a specific regulatory pathway of exosome release from airway epithelia and identify PE as novel exosome cargo. LPS stimulation of airway epithelial cells induces release of PE-containing exosomes, which is significantly attenuated by small interfering RNA depletion of Toll-like receptor 4 (TLR4). These differences were recapitulated upon intratracheal LPS administration in mice competent versus deficient for TLR4 signaling. Finally, sputum samples from subjects with cystic fibrosis colonized with Pseudomonas aeruginosa demonstrate elevated exosome content and increased PE levels. This TLR4-based mechanism highlights the first report of nonstochastic release of exosomes in the lung and couples TLR4 activation with matrikine generation. The increased quantity of these proteolytic exosomes in the airways of subjects with chronic lung disease highlights a new mechanism of injury and inflammation in the pathogenesis of pulmonary disorders.