Tylosis with oesophageal cancer (TOC) is a rare familial disorder caused by cytoplasmic mutations in inactive rhomboid 2 (iRhom2 or iR2, encoded by Rhbdf2). iR2 and the related iRhom1 (or iR1, encoded by Rhbdf1) are key regulators of the membrane-anchored metalloprotease ADAM17, which is required for activating EGFR ligands and for releasing pro-inflammatory cytokines such as TNFα (or TNF). A cytoplasmic deletion in iR2, including the TOC site, leads to curly coat or bare skin (cub) in mice, whereas a knock-in TOC mutation (toc) causes less severe alopecia and wavy fur. The abnormal skin and hair phenotypes of iR2cub/cub and iR2toc/toc mice depend on amphiregulin (Areg) and Adam17, as loss of one allele of either gene rescues the fur phenotypes. Remarkably, we found that iR1−/− iR2cub/cub mice survived, despite a lack of mature ADAM17, whereas iR2cub/cub Adam17−/− mice died perinatally, suggesting that the iR2cub gain-of-function mutation requires the presence of ADAM17, but not its catalytic activity. The iR2toc mutation did not substantially reduce the levels of mature ADAM17, but instead affected its function in a substrate-selective manner. Our findings provide new insights into the role of the cytoplasmic domain of iR2 in vivo, with implications for the treatment of TOC patients.