The folding and activation of furin occur through two pH-and compartment-specific autoproteolytic steps. In the endoplasmic reticulum (ER), profurin folds under the guidance of its prodomain and undergoes an autoproteolytic excision at the consensus furin site Arg-Thr-Lys-Arg 107 2 generating an enzymatically masked furin-propeptide complex competent for transport to late secretory compartments. In the mildly acidic environment of the trans-Golgi network/endosomal system, the bound propeptide is cleaved at the internal site 69 HRGVTKR 75 2, unmasking active furin capable of cleaving substrates in trans. Here, by using cellular, biochemical, and modeling studies, we demonstrate that the conserved His 69 is a pH sensor that regulates the compartment-specific cleavages of the propeptide. In the ER, unprotonated His 69 stabilizes a solvent-accessible hydrophobic pocket necessary for autoproteolytic excision at Arg 107 . Profurin molecules unable to form the hydrophobic pocket, and hence, the furin-propeptide complex, are restricted to the ER by a PACS-2-and COPI-dependent mechanism. Once exposed to the acidic pH of the late secretory pathway, protonated His 69 disrupts the hydrophobic pocket, resulting in exposure and cleavage of the internal cleavage site at Arg 75 to unmask the enzyme. Together, our data explain the pH-regulated activation of furin and how this His-dependent regulatory mechanism is a model for other proteins.The pH gradient formed by the various membranous compartments comprising the secretory and endocytic pathways has essential and manifold roles ranging from the regulation of protein traffic to the control of protein conformation and enzyme activities, including the processing of prohormones and proproteins by proprotein convertases (PCs). 2 The PCs, a family of calcium-dependent serine endoproteases, cleave proproteins and prohormones at doublets or clusters of basic amino acids thus generating mature bioactive proteins as well as hormonal processing intermediates that require additional post-translational modifications to gain full bioactivity (1, 2). The proteolytic maturation of prohormones by the neuroendocrine-specific PC1/3 and PC2 requires the acidic pH of maturing secretory granules (3-5), whereas the proteolytic activation of proprotein substrates by the ubiquitously expressed PC furin in the trans-Golgi network (TGN)/endosomal system is compartment-and hence pH-specific (2, 6). This compartmentspecific processing by furin is mediated in part by the pH-dependent changes in the conformation of furin substrates as well as the utilization of pH-sensitive furin cleavage sites. Furin efficiently cleaves a number of proprotein substrates at the consensus site -Arg-X-Lys/Arg-Arg-2 (2). Kinetic studies show that the P1 and P4 Arg residues are required for the efficient processing of furin substrates, whereas the P2 Arg has a modulatory role (7,8). However, at acidic pH the absence of a P2 or P4 Arg can be compensated for by the presence of positively charged residues at P6 or possibly adjacen...