This paper describes the cloning of a gene (pcp) coding for pyrrolidone carboxylyl peptidase (PYRase), an enzyme which selectively removes N-terminal pyroglutamic acid residues from polypeptides. This gene was isolated from Streptococcus pyogenes by construction of a gene library with a bacteriophage lambda-derived cosmid-Escherichia coli host system. Nucleotide sequence determination of a 1.3 kb restriction fragment revealed a 645 bp open reading frame encoding a 215-amino-acid product of M(r) 23,135 consistent with the 26 kDa polypeptide obtained from in vivo overexpression in E. coli. Southern hybridization confirmed that pcp is a single-copy gene on the S. pyogenes chromosome. 5' and 3' endpoint mapping of the 0.7 kb specific transcript observed by Northern analysis permitted the identification of transcriptional initiation and termination signals. Structural features of the pcp gene product from S. pyogenes are discussed and compared with that from Bacillus subtilis. The lack of sequence identity with any other known protein or nucleotide sequence suggests that this enzyme belongs to a new class of peptidase.