Retroviral proteins, including those from the human immunodeficiency virus (HIV), are synthesized as polyprotein precursors that require proteolytic cleavage to yield the mature viral proteins. A 99-residue polypeptide, encoded by the 5' end of the pol gene, has been proposed as the processing protease of HIV. The chemical synthesis of the 99-residue peptide was carried out by the solid-phase method, and the isolated product was found to exhibit specific proteolytic activity upon folding under reducing conditions. Upon size-exclusion chromatography, enzymatic activity was eluted at a point consistent with a dimeric molecular size. Specificity was demonstrated by the cleavage of the natural substrate HIV gag p55 into gag p24 and gag p17, as well as cleavage of small peptide substrates representing processing sites of HIV fusion proteins. The proteolytic action of the synthetic product could be inhibited by pepstatin, an aspartic protease inhibitor.