Both the propeptide in the precursor carboxypeptidase Y (proCPY) and the mature CPY (mCPY)-specific endogenous inhibitor (I(C)) inhibit CPY activity. The N-terminal inhibitory reactive site of I(C) (the N-terminal seven amino acids of I(C)) binds to the substrate-binding site of mCPY and is essential for mCPY inhibition, but the mechanism of mCPY inhibition by the propeptide is poorly understood. In this study, sequence alignment between I(C) and proCPY indicated that a sequence similar to the N-terminal region of I(C) was present in proCPY. In particular, a region including the C-terminus of the propeptide was similar to the N-terminal seven amino acids of I(C). In the presence of peptides identical to the N-terminus of I(C) and the C-terminus of the propeptide, CPY activity was competitively inhibited. The C-terminal region of the propeptide might bind to the substrate-binding site of mCPY.