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 X(1)-Gly(2)-Pro(3)-Glu(4)-Ser(5)-Leu(6)-Gly(7)-Arg(8)-Glu(9)-Asp(10)-Val(11)- Arg(12)-Asp(13)-X(14)-Ser(15)-Thr(16)-Asn(17)-Pro(18)-Pro(19)-Arg(20)-Leu(21)-X(22)-Val(23)-Thr(24)-Ala(25). Aminopeptidase P cleaved the Arg(1)-Pro(2) bond of bradykinin with a k(cat)/K-m of 5.7 x 10(5) s(-1) M(-1). N-Terminal fragments of bradykinin including Arg-Pro-Pr, but not Arg-Pro, were also cleaved. The enzyme was shown to have four binding subsites (S-1, S-1', S-2', S-3'), the first three of which must be occupied for hydrolysis to occur. Neuropeptide Y and allatostatin I were hydrolyzed at the Tyr(1)-pro(2) bond and Ala(1)-Pro(2) 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+.