The vitamin K-dependent gamma-glutamyl carboxylase catalyzes the posttranslational modification of select glutamate residues of its vitamin K-dependent substrates to gamma-carboxyglutamate. In this report, we describe a new fluorescence assay that is sensitive and specific for the propeptide binding site of active carboxylase. We employed the assay to make three important observations: (1) A tight binding fluorescein-labeled consensus propeptide can be used to quantify the active fraction of the enzyme. (2) The off-rate for a fluorescein-labeled factor IX propeptide was 3000-fold slower than the rate of carboxylation, a difference that may explain how carboxylase can carry out multiple carboxylations of a substrate during the same binding event. (3) We show evidence that substrate binding to the active site modifies the propeptide binding site of carboxylase. The significant (9-fold) differences in off-rates for the propeptide in the presence and absence of its co-substrates may represent a release mechanism for macromolecular substrates from the enzyme. Additionally, sedimentation velocity and equilibrium experiments indicate a monomeric association of enzyme with propeptide. Furthermore, the carboxylase preparation is monodisperse in the buffer used for our studies.