In mammals, activity-dependent changes in neuronal function require coordinated regulation of the protein synthesis and protein degradation machinery. However, the biochemical evidence for this balance and coordination is largely lacking. To investigate this we initially used acute metabolic radiolabeling of stimulated primary mouse neurons to follow the fate of polypeptides being newly synthesized. We observed polypeptides being newly translated exclusively during neuronal stimulation were rapidly degraded by the neuronal membrane proteasome (NMP) and not the cytosolic proteasome. This turnover correlated with enhanced production of NMP-derived peptides into the extracellular space which have the capacity to mediate neuronal signaling in part through NMDA receptors. Using in-depth, global, and unbiased mass spectrometry, we identified the nascent protein substrates of the NMP. Among these substrates, we found that immediate-early gene products c-Fos and Npas4 were targeted to the NMP during ongoing activity-dependent protein synthesis. Moreover, we found that turnover of nascent polypeptides and not full-length proteins through the NMP occurred independent of canonical ubiquitylation pathways. We propose that these findings generally define a neuronal activity-induced protein homeostasis program of coordinated protein synthesis and degradation through the NMP. This generates a new modality of neuronal signaling in the form of extracellular peptides with potential significance for our understanding of nervous system development and function.