The initial proteolytic steps in Gouda cheese leading to amino acid nitrogen (AN) have been found to reflect the essential action of the cell-bound, cell-envelope proteinase (CEP) of lactococci on the primary product of chymosin action on alpha(sl)-casein, fragment 1-23 (alpha(sl)-CN(f1-23)) as observed in vitro under cheese conditions. In the absence of CEP, alpha(sl)-CN(f1-23) accumulates in cheese and the production of AN falls. In such a cheese, only a slow conversion of alpha(sl)-CN(f1-23), catalysed by an intracellular endopeptidase, could be detected. In the presence of CEP, the early appearance in cheese of products of the action of this endopeptidase indicates significant early lysis of cells. The distinct specific actions of different types of CEP, characteristic of different lactococcal strains, on alpha(sl)-CN(f1-23) in vitro are also recognized in cheese and therefore CEP may be expected to direct further proteolysis to some extent. Increasing salt concentration in the cheese moisture does not influence initial alpha(sl)-casein conversion but inhibits the subsequent conversion of alpha(sl)-CN(f24-199), as well as AN production in cheese significantly. Dehydration of the rind additionally influences proteolysis negatively. The importance of initial alpha(sl)-casein conversion and degradation of alpha(sl)-CN(f1-23) for the development of flavour in cheese is discussed.