Neutrophil transepithelial migration (TEM) during acute inflammation is associated with mucosal injury. Using models of acute mucosal injury in vitro and in vivo, we describe a new mechanism by which neutrophils infiltrating the intestinal mucosa disrupt epithelial homeostasis. We report that junctional adhesion molecule-like protein (JAML) is cleaved from neutrophil surface by zinc metalloproteases during TEM. Neutrophil-derived soluble JAML binds to the epithelial tight junction protein coxsackie-adenovirus receptor (CAR) resulting in compromised barrier and inhibition of wound repair, through decreased epithelial proliferation. The deleterious effects of JAML on barrier and wound repair are reversed with an anti-JAML monoclonal antibody that inhibits JAML-CAR binding. JAML released from transmigrating neutrophils across inflamed epithelia may thus promote recruitment of leukocytes and aid in clearance of invading microorganisms. However, sustained release of JAML under pathologic conditions associated with persistence of large numbers of infiltrated neutrophils would compromise intestinal barrier and inhibit mucosal healing. Thus, targeting JAML-CAR interactions may improve mucosal healing responses under conditions of dysregulated neutrophil recruitment.