Bacteroides fragilis is the leading cause of anaerobic bacteremia and sepsis. Enterotoxigenic strains that produce B. fragilis toxin (BFT, fragilysin) contribute to colitis and intestinal malignancy, yet are also isolated in bloodstream infection. It is not known whether these strains harbor unique genetic determinants that confer virulence in extra-intestinal disease. We demonstrate that BFT contributes to sepsis in mice, and we identify a B. fragilis protease called fragipain (Fpn) that is required for the endogenous activation of BFT through the removal of its auto-inhibitory prodomain. Structural analysis of Fpn reveals a His-Cys catalytic dyad that is characteristic of C11-family cysteine proteases that are conserved in multiple pathogenic Bacteroides spp. and Clostridium spp. Fpn-deficient, enterotoxigenic B. fragilis has an attenuated ability to induce sepsis in mice; however, Fpn is dispensable in B. fragilis colitis, wherein host proteases mediate BFT activation. Our findings define a role for B. fragilis enterotoxin and its activating protease in the pathogenesis of bloodstream infection, which indicates a greater complexity of cellular targeting and activity of BFT than previously recognized. The expression of fpn by both toxigenic and nontoxigenic strains suggests that this protease may contribute to anaerobic sepsis in ways that extend beyond its role in toxin activation. It could thus potentially serve as a target for disease modification.