Hydrolase enzymes, including proteases, are encoded by 2-3% of the genes in the human genome and 14% of these enzymes are active drug targets1. However, the activities and substrate specificities of many proteases-especially those embedded in membranes-and other hydrolases remain unknown. Here we report a strategy for creating mechanism-based, light-activated protease and hydrolase substrate traps in complex mixtures and live mammalian cells. The traps capture substrates of hydrolases, which normally use a serine or cysteine nucleophile. Replacing the catalytic nucleophile with genetically encoded 2,3-diaminopropionic acid allows the first step reaction to form an acyl-enzyme intermediate in which a substrate fragment is covalently linked to the enzyme through a stable amide bond2; this enables stringent purification and identification of substrates. We identify new substrates for proteases, including an intramembrane mammalian rhomboid protease RHBDL4 (refs. 3,4). We demonstrate that RHBDL4 can shed luminal fragments of endoplasmic reticulum-resident type I transmembrane proteins to the extracellular space, as well as promoting non-canonical secretion of endogenous soluble endoplasmic reticulum-resident chaperones. We also discover that the putative serine hydrolase retinoblastoma binding protein 9 (ref. 5) is an aminopeptidase with a preference for removing aromatic amino acids in human cells. Our results exemplify a powerful paradigm for identifying the substrates and activities of hydrolase enzymes.