The human somatic angiotensin converting enzyme (ACE) contains two homologous domains, each bearing a zinc-dependent active site. All of the synthetic inhibitors of this enzyme used in clinical applications interact with these two active sites to a similar extent. Recently, several lines of evidence have suggested that the N-terminal active site of ACE might be involved in specific hydrolysis of some important physiological substrates, like Acetyl-Seryl-Aspartyl-Lysyl-Proline, a negative regulator of hematopoietic stem cell differentiation and proliferation. These findings have stimulated studies aimed at identifying new ACE inhibitors able to block only one of the two active sites of this enzyme. By screening phosphinic peptide libraries, we discovered a phosphinic peptide Ac-Asp-(L)Phepsi(PO2-CH2)(L)Ala-Ala-NH2, called RXP 407, which is able to differentiate the two ACE active sites, with a dissociation constant three orders of magnitude lower for the N-domain of the enzyme. The usefulness of a combinatorial chemistry approach to develop new lead structures is underscored by the unusual chemical structure of RXP 407, as compared with classical ACE inhibitors. As a highly potent and selective inhibitor of the N-terminal active site of wild ACE (Ki = 12 nM), RXP 407, which is metabolically stable in vivo, may lead to a new generation of ACE inhibitors able to block in vivo only a subset of the different functions regulated by ACE.