A new fungal strain that was isolated from our library was identified as an Aspergillus oryzae and noted to produce a novel proly endopeptidase. The enzyme was isolated, purified, and characterized. The molecular mass of the prolyl endopeptidase was estimated to be 60 kDa by using SDS-PAGE. Further biochemical characterization assays revealed that the enzyme attained optimal activity at pH 4.0 with acid pH stability from 3.0 to 5.0. Its optimum temperature was 30 °C and residual activity after 30 min incubation at 55 °C was higher than 80 %. The enzyme was activated and stabilized by Ca(2+) but inhibited by EDTA (10 mM) and Cu(2+). The K m and k cat values of the purified enzyme for different length substrates were also evaluated, and the results imply that the enzyme from A. oryzae possesses higher affinity for the larger substrates. Furthermore, this paper demonstrates for the first time that a prolyl endopeptidase purified from A. oryzae is able to hydrolyze intact casein.