Tylosis with Oesophageal Cancer (TOC, also called Howel-Evans syndrome) is a rare familial disorder caused by cytoplasmic mutations in inactive rhomboid 2 (iRhom2). iRhom2 and the related iRhom1 are key regulators of the metalloprotease ADAM17 (A Disintegrin and Metalloproteinase 17), which is required for activating EGFR ligands and for releasing cytokines such as TNF from cells. A cytoplasmic deletion in iRhom2, including the TOC site, leads to bare skin (cub) in mice, whereas a knock-in TOC mutation causes alopecia and wavy fur. The alopecia in the cub and TOC iRhom2 mutants depends on the EGFR-ligand Amphiregulin (AREG), with loss of a one or both alleles of AREG rescuing hair growth. We show that the abnormal skin and hair of homozygous iRhom2 cub or TOC mice is restored to normal by inactivation of one allele of ADAM17. This indicates that the skin phenotypes seen in the iRhom2 cytoplasmic tail mutant mice depend on ADAM17, most likely through an effect on its substrate AREG. Bone marrow derived macrophages (BMDMs) from iR2cub/cub mice don’t support ADAM17 maturation or TNFshedding, whereas iR2toc/toc BMDM have mature ADAM17 and can shed TNF. We subsequently crossed iR2cub/cub and iR2toc/toc mice with iR1-/- animals to analyze ADAM17 maturation and function that depends only on the mutant iRhom2. Remarkably, whereas iR1-/-iR2-/- mice die perinatally due to loss of ADAM17 activity, iR1-/-iR2cub/cub mice survive, even though they also lack mature and functional ADAM17. Moreover, although cells from iR1-/-iR2toc/toc animals express normal levels of mature ADAM17, they have a substrate selective impairment of ADAM17. This was corroborated through an analysis of newborn iR1-/-iR2toc/toc mice that uncovered developmental defects consistent with a substrate selective impairment of ADAM17 in vivo. Our findings suggest that the cytoplasmic tail of iRhom2 has a role in stabilizing ADAM17 and in its substrate specificity. Thus, the skin phenotypes in the iRhom2 cytoplasmic tail mutant mice are likely caused by non-physiological gain of function effects of a complex between ADAM17, the iRhom2 mutant and AREG that is independent of ADAM17 catalytic activity. These findings may have valuable implications for the treatment of TOC patients.