The membrane-bound form of aminopeptidase P (aminoacylprolyl-peptide hydrolase) (EC 3.4.11.9) was purified 670-fold to apparent homogeneity from rat lung microsomes. The enzyme was solubilized from the membranes using a phosphatidylinositol-specific phospholipase C. The purification scheme also resulted in homogeneous preparations of dipeptidylpeptidase IV (EC 3.4.14.5) and membrane dipeptidase (EC 3.4.13.19). Aminopeptidase P had a subunit molecular weight of 90,000, which included at least 17% N-linked carbohydrate. The molecular weight by gel permeation chromatography varied from 220,000 to 340,000, depending on the conditions used. The amino acid composition was determined and the N-terminal sequence was found to be X1-Gly2-Pro3-Glu4-Ser5-Leu6-Gly7-Arg8-Glu9-As p10-Val11-Arg12-Asp13-X14-Ser15- Thr16-Asn17-Pro18-Pro19-Arg20-Leu21- X22-Val23-Thr24-Ala25-. Aminopeptidase P cleaved the Arg1-Pro2 bond of bradykinin with a kcat/Km of 5.7 x 10(5) s-1 M-1. N-Terminal fragments of bradykinin including Arg-Pro-Pro, but not Arg-Pro, were also cleaved. The enzyme was shown to have four binding subsites (S1, S1', S2'. S3'), the first three of which must be occupied for hydrolysis to occur. Neuropeptide Y and allatostatin I were hydrolyzed at the Tyr1-Pro2 bond and Ala1-Pro2 bond, respectively. The pH optimum for Arg-Pro-Pro cleavage was 6.8-7.5 in most buffers. The enzyme was most stable in the range of pH 7.0-10.5 in the presence of poly(ethylene glycol). NaCl inhibited activity completely at 2 M. Mn2+ had variable effects on activity, depending on its concentration and the substrate used. Various peptides having an N-terminal Pro-Pro sequence were inhibitory. The enzyme was also inhibited by EDTA, o-phenanthroline, 2-mercaptoethanol, dithiothreitol, p-(chloromercuri)benzenesulfonic acid, apstatin, and captopril. The carboxyalkyl angiotensin-converting enzyme inhibitors, ramiprilat and enalaprilat, inhibited activity in the micromolar range only in the presence of Mn2+.