We have previously shown that, among many protease inhibitors examined, only a leupeptin analogue, Ac-Leu-Leu-Nle-al (ALLNal), induces neurite outgrowth in PC12h cells. Since this neurite outgrowth is different from that induced by nerve growth factor (NGF) in terms of morphology and persistence, the existence of a specific protease which regulates neurite formation in PC12h cells was expected. A set of 10 ALLNal analogue peptide protease inhibitors was synthesized and examined for their potency in inducing neurite outgrowth in PC12h cells. Substitution of the N-terminal acetyl residue in ALLNal by benzyloxycarbonyl (Z) increased the activity by about 4 times. For Z-Leu-Leu-X-al, neurite outgrowth was induced in the following order: Leu greater than Phe greater than Nva greater than Val = Ile = Nle greater than Ala greater than Gly at the X residue. The potency of Z-Leu-Leu-Leu-al (ZLLLal) was 50-fold stronger than that of ALLNal. ZLLLal provides a strong tool for characterizing this new type of protease.