Recent data suggest that botulinum type-B neurotoxin is a protease which acts on vesicle-associated membrane protein, isoform 2 (VAMP-2). In this report, botulinum type-B neurotoxin is shown to cleave a synthetic fragment (HV62) of VAMP-2, corresponding to the bulk of the hydrophilic domain (amino acids 33-94). The neurotoxin acts at a single site between Gln76 and Phe77. Little or no proteolytic activity by botulinum type-B neurotoxin was observed with peptides containing 7, 10 or 20 amino acids spanning the site of cleavage. The proteolytic action of neurotoxin was strongly inhibited by EDTA and o-phenanthroline whereas captopril and phosphoramidon were ineffective. A series of model peptide substrates were synthesised in order to define the smallest VAMP-2 fragment to be cleaved by botulinum type-B neurotoxin. Data obtained from these substrates suggest that the neurotoxin belongs to a novel class of zinc-endoprotease; more than 12 amino acid residues are required on both the NH2- and COOH-terminal side of the cleavage site for optimal proteolytic activity. The results demonstrate that no other components of cellular vesicles are required for the specific action of the neurotoxin on VAMP-2. The data further show that the highly specific action of the neurotoxin is not dictated solely by the properties of the amino acid residues at the cleavage site but is also dependent on amino acid sequences distal to its site of action.