Proteolysis is it regulatory step in many physiological processes, but which proteases in what cellular sites art involved in activation or degradation of which peptides is not well known. We developed a rapid assay consisting of living cells and fluorogenic protease substrates to determine which bioactive peptides art possible natural substrates of a specific protease with the multifunctional or moonlighting protein CD26/dipeptidyl peptidase IV (DPPIV) as a model. CD26/DPPIV catalyzes cleavage of peptides from the amino terminus of peptides with proline at the penultimate position. Many biologically active peptides, such as beta-casomorphin(1-5), contain proline in the penultimate Position. We incubated living Jurkat cells, which are T cells that lack CD26/DPPIV and CD26/DPPIV-transfected Jurkat cells in the presence of the fluorogenic substrate [Ala-pro](2)-cresyl violet (Magic Red) and beta-casomorphin(1-5). Fluorescent cresyl violet was generated by CD26/DPPIV-transfected Jurkat cells but not by wild-type Jurkat cells with a K-m of 3.7 muM. beta-Casomorphin(1-5) appeared to be a possible natural substrate of CD26/DPPIV because it inhibited production of fluorescence competitively, (K-i = 60 muM). The assay using living cells and a fluorogenic protease substrate is an efficient system to determine whether specific peptides are possible natural substrates of a particular protease.