Human AFG3L2 is a compartmental AAA+ protease that performs ATP-fueled degradation at the matrix face of the inner mitochondrial membrane. Identifying how AFG3L2 selects substrates from the diverse complement of matrix-localized proteins is essential for understanding mitochondrial protein biogenesis and quality control. Here, we create solubilized forms of AFG3L2 to examine the enzyme's substrate specificity mechanisms. We show that conserved residues within the presequence of the mitochondrial ribosomal protein, MrpL32, target the subunit to the protease for processing into a mature form. Moreover, these residues can act as a degron, delivering diverse model proteins to AFG3L2 for degradation. By determining the sequence of degradation products from multiple substrates using mass spectrometry, we construct a peptidase specificity profile that displays constrained product lengths and is dominated by the identity of the residue at the P1' position, with a strong preference for hydrophobic and small polar residues. This specificity profile is validated by examining the cleavage of both fluorogenic reporter peptides and full polypeptide substrates bearing different P1' residues. Together, these results demonstrate that AFG3L2 contains multiple modes of specificity, discriminating between potential substrates by recognizing accessible degron sequences and performing peptide bond cleavage at preferred patterns of residues within the compartmental chamber.