VAMP/synaptobrevin-associated protein B (VAP-B) is a type II ER membrane protein, but its N-terminal MSP domain (MSPd) can be cleaved and secreted. Mutations preventing the cleavage and secretion of MSPd have been implicated in cases of human neurodegenerative diseases. The site of VAP cleavage and the tissues capable in releasing the processed MSPd are not understood. In this study, we analyze the C. elegans VAP-B homolog, VPR-1, for its processing and secretion from the intestine. We show that intestine-specific expression of an N-terminally FLAG-tagged VPR-1 rescues underdeveloped gonad and sterility defects in vpr-1 null hermaphrodites. Immunofluorescence studies reveal that the tagged intestinal expressed VPR-1 is present at the distal gonad. Mass spectrometry analysis of a smaller product of the N-terminally tagged VPR-1 identifies a specific cleavage site at Leu156. Mutation of the leucine results in loss of gonadal MSPd signal and reduced activity of the mutant VPR-1. Thus, we report for the first time the cleavage site of VPR-1 and provide direct evidence that intestinally expressed VPR-1 can be released and signal in the distal gonad. These results establish the foundation for further exploration of VAP cleavage, MSPd secretion, and non-cell-autonomous signaling in development and diseases.