Pancreatic polypeptide (PP) is initially synthesized as a larger precursor that requires post-translational processing to produce the biologically active hexatriacontapeptide. These steps include tryptic cleavage at paired basic residues, their subsequent removal by a carboxypeptidase B-like enzyme, and formation of a carboxyl-terminal amide moiety via the action of peptidyl-glycyl alpha-amidating monooxygenase. To examine these reactions further, we utilized the pZIPneo(SVX) retroviral vector to express a cDNA clone encoding human PP in several cell lines including a fibroblast line (psi-2), two endocrine cell lines known to produce amidated peptides (AtT-20 and PC12), and two lines that do not ordinarily produce amidated peptides (RIN5-f and GH3). Transfected psi-2 cells produced an unprocessed precursor of PP that appeared to be secreted constitutively with little remaining in intracellular stores. No post-translational processing of the PP precursor was evident in these cells. By contrast, all 4 endocrine-derived cell lines, regardless of the nature of their endogenous products, were capable of expressing fully processed and carboxyl-terminally amidated PP. Moreover, these lines had the ability to store the processed products. Our results support the notion that post-translational processing of peptide hormone precursors requires storage in secretory granules that contain the appropriate processing enzymes. Furthermore, enzymes such as peptidyl-glycyl alpha-amidating monooxygenase that are required for processing peptides may be a common feature of endocrine-derived cells regardless of the requirement for their activity to process endogenous products.