Intramembrane cleavage of transmembrane proteins is a fundamental cellular process to produce important signals that elicit biological responses. These proteolytic events are known as regulated intramembrane proteolysis (RIP). ATF6 and BBF2H7 are transmembrane basic leucine zipper transcription factors and are subjected to RIP by site-1 protease (S1P) and site-2 protease (S2P) sequentially in response to endoplasmic reticulum (ER) stress. However, the detailed mechanisms responsible for RIP of the transcription factors, including the precise cutting sites, are still unknown. In this study, we demonstrated that S1P cleaves BBF2H7 just before the RXXL S1P recognition motif. Conversely, S2P cut at least three different sites in the membrane (next to Leu380, Met381, and Leu385), indicating that S2P cleaves the substrates at variable sites or via a multistep process. Interestingly, we found BBF2H7-derived small peptide (BSP) fragments located between the S1P and S2P cleavage sites in cells exposed to ER stress. Major type of BSP fragments was composed of 45 amino acid including partial transmembrane and luminal regions and easily aggregates like amyloid β (Aβ) protein. These results advance the understanding of poorly characterized ER stress-dependent RIP. Furthermore, the aggregable peptides produced by ER stress could link to the pathophysiology of neurodegenerative disorders.