Cidofovir (HPMPC) is a broad-spectrum antiviral agent, currently used to treat AIDS-related human cytomegalovirus retinitis. Cidofovir has recognized therapeutic potential for orthopox virus infections, although its use is hampered by its inherent low oral bioavailability. Val-Ser-cyclic HPMPC (Val-Ser-cHPMPC) is a promising peptide prodrug which has previously been shown by us to improve the permeability and bioavailability of the parent compound in rodent models (Eriksson et al., 2008. Molecular Pharmaceutics 5, 598-609). Puromycin-sensitive aminopeptidase was partially purified from Caco-2 cell homogenates and identified as a prodrug activating enzyme for Val-Ser-cHPMPC. The prodrug activation process initially involves an enzymatic step where the l-Valine residue is removed by puromycin-sensitive aminopeptidase, a step that is bestatin-sensitive. Subsequent chemical hydrolysis results in the generation of cHPMPC. A recombinant puromycin-sensitive aminopeptidase was generated and its substrate specificity investigated. The k(cat) for Val-pNA was significantly lower than that for Ala-pNA, suggesting that some amino acids are preferred over others. Furthermore, the three-fold higher k(cat) for Val-Ser-cHPMPC as compared to Val-pNA suggests that the leaving group may play an important role in determining hydrolytic activity. In addition to its ability to hydrolyze a variety of substrates, these observations strongly suggest that puromycin-sensitive aminopeptidase is an important enzyme for activating Val-Ser-cHPMPC in vivo. Taken together, our data suggest that puromycin-sensitive aminopeptidase makes an attractive target for future prodrug design.