Angiotensin-converting enzyme (ACE) is a zinc metallopeptidase that plays a major role in blood homoeostasis and reproduction in mammals. In vertebrates, both transmembrane and soluble ACE, containing one or two homologous active sites, have been characterized. So far, several ACEs from invertebrates have been cloned, but only in insects. They are soluble and display a single active site. Using biochemical procedures, an ACE-like activity was detected in our model, the leech, Theromyzon tessulatum. Annelida is the most distant phylum in which an ACE activity has been observed. To gain more insight into the leech enzyme, we have developed a PCR approach to characterize its mRNA. The approx. 2 kb cDNA has been predicted to encode a 616-amino-acid soluble enzyme containing a single active site, named TtACE (T. tessulatum ACE). Surprisingly, its primary sequence shows greater similarity to vertebrates than to invertebrates. Stable in vitro expression of TtACE in transfected Chinese-hamster ovary cells revealed that the leech enzyme is a functional metalloprotease. As in mammals, this 79 kDa glycosylated enzyme functions as a dipeptidyl carboxypeptidase capable of hydrolysing angiotensin I to angiotensin II. However, a weak chloride inhibitory effect and acetylated N-acetyl-SDKP (Ac SDAcKP) hydrolysis reveal that TtACE activity resembles that of the N-domain of mammalian ACE. In situ hybridization shows that its cellular distribution is restricted to epithelial midgut cells. Although the precise roles and endogenous substrates of TtACE remain to be identified, characterization of this ancestral peptidase will help to clarify its physiological roles in non-insect invertebrate species.