As is the case with many other peptide hormones of the brain and gut, gastrin requires a carboxyl-terminal amide moiety for optimal biological activity. In the structure of progastrin, the carboxyl-terminal Phe of gastrin is followed by the sequence Gly93-Arg94-Arg95, which must be processed sequentially by an endoprotease, a carboxypeptidase, and an amidating enzyme to produce amidated bioactive gastrin. To examine the molecular determinants of peptide amidation in vivo, we mutated the wild-type Gly93 residue of progastrin to Ala93 and Ser93 and expressed the three progastrin DNAs in GH3 and MTC 6-23 endocrine cell lines. Although substantial quantities of amidated gastrin were seen in cells expressing wild-type progastrin, replacement of Gly93 with Ala93 completely abolished production of amidated gastrin when the cells were incubated in standard medium containing only L-alanine. In a similar fashion, cells expressing [Ser93]progastrin also demonstrated no production of amidated gastrin. When cells expressing [Ala93]- or [Ser93]progastrin were incubated in the presence of 1 mg/ml D-alanine or D-serine, respectively, a small but consistent amount of amidated gastrin production was detected (< 1% of wild type). These data lead us to conclude that the amidating enzyme has a rigid substrate specificity for a glycine-extended precursor. Furthermore, this in vivo substrate specificity confirms the importance of the pro-S-alpha-hydrogen of the carboxyl-terminal glycine for enzyme-substrate recognition.