The endoproteolytic activity previously detected in rat intestinal mucosal extracts (Beinfeld M., Bourdais, J., Kuks, P., Morel, A., and Cohen, P. (1989) J. Biol. Chem. 264, 4460-4465), was purified to homogeneity as a 65-kDa molecular species. This putative proprotein-processing enzyme cleaves the peptide bond on the carboxyl side of a single arginine residue in hepta-[Leu62-Gln-Arg-Ser-Ala-Asn-Ser68] or trideca-[Asp56-Glu-Met-Arg-Leu-Glu-Leu-Gln-Arg-Ser-Ala-Asn-+ ++Ser68] peptides, reproducing the prosomatostatin sequence around Arg64, the locus for endoproteolytic release of either somatostatin-28 or its NH2-terminal fragment, somatostatin-28-(1-12), from their common precursor. This enzyme exhibits a strict selectivity for arginyl residues, as demonstrated with related substrates, and did not cleave at lysyl residues. Moreover, only arginyl residues belonging to peptides of the prosomatostatin family were cleaved, since no hydrolysis of peptides from other prohormones was detected. In addition, the arginine residue situated at position -5 on the NH2-terminal side of Arg64 not only did not function as a cleavage locus, but had no effect on the overall cleavage kinetics of the prosomatostatin-(56-68) peptide substrate. This enzyme also cleaved, but with much less efficiency, the peptide bond on the carboxyl side of an arginine in peptides containing either an Arg-Lys or a Lys-Arg doublet corresponding to prohormone cleavage sites. This enzyme was insensitive to divalent cation chelators, was completely inhibited by aprotinin and leupeptin, and was somewhat inhibited by other serine-protease inhibitors. It is concluded that this endoprotease is a serine protease and could be involved in prohormone or proprotein post-translational processing at single arginine cleavage sites.