Sensing of pathogens by pattern recognition receptors (PRR) is critical to initiate protective host defence reactions. However, activation of the immune system has to be carefully titrated to avoid tissue damage necessitating mechanisms to control and terminate PRR signalling. Dectin-1 is a PRR for fungal β-glucans on immune cells that is rapidly internalised after ligand-binding. Here, we demonstrate that pathogen recognition by the Dectin-1a isoform results in the formation of a stable receptor fragment devoid of the ligand binding domain. This fragment persists in phagosomal membranes and contributes to signal transduction which is terminated by the intramembrane proteases Signal Peptide Peptidase-like (SPPL) 2a and 2b. Consequently, immune cells lacking SPPL2b demonstrate increased anti-fungal ROS production, killing capacity and cytokine responses. The identified mechanism allows to uncouple the PRR signalling response from delivery of the pathogen to degradative compartments and identifies intramembrane proteases as part of a regulatory circuit to control anti-fungal immune responses.