This study demonstrates the presence of boc-Gln-Arg-Arg-MCA cleaving activity in bovine chromaffin granule membranes that resembles yeast Kex2 proteolytic activity. The chromaffin granule boc-Gln-Arg-Arg-MCA cleaving activity, like Kex2 proteolytic activity, shows calcium dependence, optimum activity at pH 7.5-8.2, inhibition by serine protease inhibitors, and preference for cleavage at the COOH-terminal side of Arg-Arg and Lys-Arg, over Lys-Lys, paired basic residues. Potent inhibition by the active-site directed inhibitor [D-Tyr]-Glu-Phe-Lys-Arg-CK (20 microM) provided further evidence for dibasic residue cleavage site specificity. These results are the first report of endogenous mammalian Kex2-like proteolytic activity that may be related to PC1/PC3 and PC2 enzymes, the newly discovered mammalian homologues of Kex2 protease. It will be important to determine the role of this Kex2-like proteolytic activity in processing the precursors of adrenal medullary neuropeptides.