Escherichia coli is an essential host for large-scale expression of heterologous polypeptides. However, further applications are limited by the formation of potential protein aggregates. In this work, we developed a novel on-column tag removal and purification system based on Fh8 hydrophobic interaction chromatography purification and Delta I-CM self-cleavage to obtain soluble tumor necrosis factor-related apoptosis-inducing ligand (TRAIL). We evaluated several methods to improve TRAIL solubility and finally demonstrated that the Fh8 tag was a powerful solubility enhancer. Finally, we replaced the tobacco etch virus (TEV) protease site with a Delta I-CM self-cleavage intein to simplify the purification process. The released soluble TRAIL purity and yield reached 98.4% and 82.1 mg/L in shake flasks, respectively. Thus, the Fh8-Delta I-CM system enhanced target protein solubility by Fh8, enabled on-column tag removal and purification based on Fh8 calcium-binding properties and Delta I-CM self-cleavage properties, and promoted the release of highly active protein with high yield and purity. Overall, our findings suggest that this Fh8-Delta I-CM system could be used as a novel solubility-inducing and purification fusion tag for protein production in E. coli.