Enzymological studies have implicated two Ca2+ dependent endopeptidases in the conversion of proinsulin to insulin: a type 1 activity and a type 2 activity which cleave on the C-terminal side of R31R32 and K64R65 in proinsulin, respectively. These activities were further characterized and their relationship to the mammalian family of subtilisin-like proteases was investigated. PC2 was expressed in neuroendocrine tissues and in insulinoma secretory granule fractions predominantly as a 65kDa protein. On anion-exchange chromatography of solubilized granules, PC1/3 immunoreactivity comigrated with a peak of type 1 activity whereas PC2 immunoreactivity coeluted with the peak of type 2 endopeptidase activity. PC2 antiserum gave a specific immunoprecipitation of type 2 activity from insulin granule extracts. It was concluded that the PC2 gene-product has type 2 endopeptidase activity.