Profilaggrin, an insoluble precursor of the intermediate filament-associated protein filaggrin, contains multiple internal repeats (PIRs). At terminal differentiation of epidermis, proteolytic processing within a "linker" region of each PIR releases soluble filaggrin in a twostage process. The first stage endoproteinase (PEP1, profilaggrin endoproteinase 1) cleaves mouse profilaggrin at a subset of the linkers, yielding processing intermediates consisting of several filaggrin repeats. An epidermal endoproteinase that cleaves the requisite linker subset has been purified 4,966-fold from mouse epidermal extracts. SDS-polyacrylamide gel electrophoresis demonstrated a band of molecular mass of 29.5 kDa that correlated with the activity. Labeling with [3 H]diisopropylfluorophosphate identified PEP1 as a serine protease; inhibitor studies suggest that it is similar to chymotrypsin, as expected from previous in vivo studies. The purified PEP1 cleaved a peptide derived from profilaggrin (P1) at three residues within and adjacent to a multiple tyrosine sequence, consistent with the in vivo processing sites. No exopeptidase activity was detected. PEP1 is only active toward insoluble profilaggrin, resulting in partial solubilization, consistent with a role in dispersal of profilaggrin during terminal differentiation. In contrast to the specific cleavage of mouse profilaggrin, PEP1 cleaved all linker regions of rat profilaggrin. Studies with phosphorylated P1 suggest that PEP1 specificity may be partly regulated by profilaggrin phosphorylation.