Signal peptide peptidase (SPP) is an ER-resident aspartyl intramembrane protease cleaving proteins within type II-oriented transmembrane segments. Here, we identified the tail-anchored protein Three prime repair exonuclease 1 (TREX1) as a novel substrate of SPP. Based on its DNase activity, TREX1 removes cytosolic DNA acting as a negative regulator of the DNA-sensing cGAS/STING pathway. TREX1 loss-of-function variants cause Aicardi-Goutières syndrome (AGS), a type I interferonopathy. Cleavage of ER-bound TREX1 by SPP releases a cleavage product into the cytosol. Proteolysis depends on sequence determinants within the transmembrane segment and is modulated by different disease-associated TREX1 variants. The AGS-causing T303P variant greatly enhanced susceptibility of TREX1 to intramembrane cleavage accounting for increased degradation and reduced protein stability in AGS patients homozygous for this variant. Other variants within the TREX1 transmembrane segment, P290L, Y305C and G306A, associated with systemic lupus erythematosus variably modulated TREX1 proteolytic processing. Altogether, intramembrane proteolysis can act as a regulator of TREX1 both by controlling its cytosolic localization and mediating its turnover with implications for disease pathogenesis.