A disintegrin and metalloproteinase 17 (ADAM17) controls the release of the pro-inflammatory cytokine tumor necrosis factor α (TNFα, also known as TNF) and is crucial for protecting the skin and intestinal barrier by proteolytic activation of epidermal growth factor receptor (EGFR) ligands. The seven-membrane-spanning protein called inactive rhomboid 2 (Rhbdf2; also known as iRhom2) is required for ADAM17-dependent TNFα shedding and crosstalk with the EGFR, and a point mutation (known as sinecure, sin) in the first transmembrane domain (TMD) of Rhbdf2 (Rhbdf2sin) blocks TNFα shedding, yet little is known about the underlying mechanism. Here, we used a structure-function analysis informed by structural modeling to evaluate the interaction between the TMD of ADAM17 and the first TMD of Rhbdf2, and the role of this interaction in Rhbdf2- ADAM17-dependent shedding. Moreover, we show that double mutant mice that are homozygous for Rhbdf2sin/sin and lack Rhbdf1 closely resemble Rhbdf1/2-/- double knockout mice, highlighting the severe functional impact of the Rhbdf2sin/sin mutation on ADAM17 during mouse development. Taken together, these findings provide new mechanistic and conceptual insights into the critical role of the TMDs of ADAM17 and Rhbdf2 in the regulation of the ADAM17 and EGFR, and ADAM17 and TNFα signaling pathways.