Intracellular generation of the photosensitiser, protoporphyrin IX, from a series of dipeptide derivatives of the haem precursor, 5-aminolaevulinic acid (ALA), was investigated in transformed PAM212 murine keratinocytes, together with studies of their intracellular metabolism. Porphyrin production was substantially increased compared with equimolar ALA using N-acetyl terminated phenylalanyl, leucinyl and methionyl ALA methyl ester derivatives in the following order: Ac-L-phenylalanyl-ALA-Me, Ac-L-methionyl-ALA-Me and Ac-L-leucinyl-ALA-Me. The enhanced porphyrin production was in good correlation with improved photocytotoxicity, with no intrinsic dark toxicity apparent. However, phenylalanyl derivatives without the acetyl/acyl group at the N terminus induced significantly less porphyrin, and the replacement of the acetyl group by a benzyloxycarbonyl group resulted in no porphyrin production. Porphyrin production was reduced in the presence of class-specific protease inhibitors, namely serine protease inhibitors. Using siRNA knockdown of acylpeptide hydrolase (ACPH) protein expression, we showed the involvement of ACPH, a member of the prolyl oligopeptidase family of serine peptidases, in the hydrolytic cleavage of ALA from the peptide derivatives. In conclusion, ALA peptide derivatives are capable of delivering ALA efficiently to cells and enhancing porphyrin synthesis and photocytotoxicity; however, the N-terminus state, whether free or substituted, plays an important role in determining the biological efficacy of ALA peptide derivatives.