A novel cDNA, designated carboxypeptidase Z (CPZ), was identified based on its homology to known metallocarboxypeptidases. Northern blot analysis shows bands of 2.1 and/or 2.6 kilobases in all tissues examined. The major form of CPZ mRNA in human salivary gland encodes a protein with an open reading frame of 641 amino acids. In addition, three variants were found that presumably arise due to alternative intron splicing. The 641-amino acid protein contains an 18-residue signal peptide-like sequence, a 120-residue region that shows 23-29% amino acid identity with a Cys-rich domain found in frizzled proteins and in type XVIII collagen, and then a 390-residue carboxypeptidase domain with 49% amino acid identity to carboxypeptidases E and N. The 641-amino acid form of CPZ expressed in the baculovirus system cleaves 5-dimethylaminonaphthalene-1-sulfonyl (dansyl)-Phe-Ala-Arg, although the level of enzyme activity was approximately 10-fold lower than either carboxypeptidase E or D expressed using the same viral system. The CPZ activity is more active at neutral pH than at pH 5.5 and is inhibited by active site-directed inhibitors of metallocarboxypeptidases. In summary, CPZ is a novel metallocarboxypeptidase that is active toward substrates with C-terminal basic amino acids.