Mature peptide hormones and neuropeptides are typically synthesized from much larger precursors and require several posttranslational processing steps— including proteolytic cleavage—for the formation of the bioactive species. The subtilisin-related proteolytic enzymes that accomplish neuroendoerine-specific cleavages are known as prohormone convertases 1 and 2 (PCI and PC2). The cell biology of these proteases within the regulated secretory pathway of neuroen-docrine cells is complex, and they are themselves initially synthesized as inactive precursor molecules. ProPCl propeptide cleavage occurs rapidly in the endo-plasmic reticulum, yet its major site of action on prohormones takes place later in the secretory pathway. PC1 undergoes an interesting carboxyl terminal processing event whose function appears to be to activate the enzyme. ProPC2, on the other hand, exhibits comparatively long initial folding times and exits the en-doplasmic reticulum without propeptide cleavage, in association with the neuro-endocrine-specific protein 7B2. Once the proPC2/7B2 complex arrives at the trans-Golgi network, 7B2 is internally cleaved into two domains, the 21-kDa fragment and a carboxy-terminal 31 residue peptide. PC2 propeptide removal occurs in the maturing secretory granule, most likely through autocatalysis, and 7B2 association does not appear to be directly required for this cleavage event. However, if proPC2 has not encountered 7B2 intracellularly, it cannot generate a cat-alytically active mature species. The molecular mechanism behind the intriguing intracellular association of 7B2 and proPC2 is still unknown, but may involve conformational rearrangement or stabilization of a proPC2 conformer mediated by a 36-residue internal segment of 21-kDa 7B2. © 2000, Elsevier Science & Technology