The S. cerevisiae genome encodes two M16A enzymes: Axl1p and Ste23p. Of the two, Ste23p shares significantly higher sequence identity with M16A enzymes from other species, including mammalian insulin-degrading enzymes (IDEs). In this study, recombinant Ste23p and R. norvegicus IDE (RnIDE) were isolated from E. coli, and their enzymatic properties compared. Ste23p was found to cleave established RnIDE substrates, including the amyloid-β peptide (Aβ1–40) and insulin B-chain. A novel internally quenched fluorogenic substrate (Abz–SEKKDNYIIKGV–nitroY-OH) based on the polypeptide sequence of the yeast P2 a-factor mating propheromone was determined to be a suitable substrate for both Ste23p and RnIDE, and was used to conduct comparative enzymological studies. Both enzymes were most active at 37 °C, in alkaline buffers and in high salt environments. In addition, the proteolytic activities of both enzymes towards the fluorogenic substrate were inhibited by metal chelators, thiol modifiers, inhibitors of cysteine protease activity and insulin. Characteristics of STE23 expression were also evaluated. Our analysis indicates that the 5′ terminus of the STE23 gene has been mischaracterized, with the physiologically relevant initiator corresponding to residue M53 of the publicly annotated protein sequence. Finally, we demonstrate that, unlike haploid-specific Axl1p, Ste23p is expressed in both haploid and diploid cell types. Our study presents the first comprehensive biochemical analysis of a yeast M16A enzyme, and provides evidence that S. cerevisiae Ste23p has enzymatic properties that are highly consistent with mammalian IDEs and other M16A enzymes.