Toulouse says the split is amicable, and that he's moving on for "complex and personal" reasons. He's been a Microsoft employee for just under 18 years, starting full-time on April 11, 1994 at the age of 21 (which is a lot more impressive than what most of us were doing at age 21).
It's unclear who will fill his shoes, but we've reached out to Microsoft for comment.
Update: Microsoft has issued the following comment to Joystiq regarding the departure of Stephen Toulouse, and declined to name his replacement: "As you know, after more than 17 years at Microsoft, Stephen Toulouse has decided to leave the company. We thank Stephen for his years of contributions and wish him all the best. We do not have any details to share around a potential successor for Stepto at this time, but can assure you that the Xbox LIVE Enforcement Squad will continue their work to help ensure a safer and more secure experience on Xbox LIVE for our nearly 40 million members."