Brain-specific angiogenesis inhibitor 2 (BAI2) is a member of adhesion-G protein-coupled receptors (GPCRs). BAI2 is dominantly expressed in the brain and its physiological ligands and functions are still unclear. Adhesion-GPCRs, including BAI2, commonly have a long N-terminal extracellular region (ECR) containing the GPCR proteolysis site (GPS) and the cleavage of the ECR at the GPS domain is suspected to be important for their function. In this study, we analyzed the proteolytic processing of BAI2 and its activation mechanism. Several cleaved C-terminal fragments of BAI2 were identified in mouse hippocampus. We confirmed that mutation in the GPS domain caused inhibition of the proteolysis of BAI2, which indicated the possibility that BAI2 was cleaved at the GPS domain. The association of the ECR putatively cleaved at the GPS domain and the C-terminal seven-transmembrane (7TM) fragment was detected by co-immunoprecipitation. We also found that furin prohormone convertase cleaved BAI2 at another site in the ECR. Additionally, the C-terminal fragment cleaved at the GPS domain specifically activated the nuclear factor of activated T-cells (NFAT) pathway. These results suggest that BAI2 is a functional GPCR regulated by proteolytic processing and activates the NFAT pathway.