Alkaline extracellular protease (AEP) from Yarmwia /ipo/'ica is synthesized as a precursor with a 157 aa prepro-region. Signal peptide cleavage was shown to occur after Al a,, by N-terminal amino acid radiosequencing of the largest intracellular AEP precursor. AEP proteolytic activity was not required for AEP processing. After a change of the putative active site Ser to Ala, inactive AEP with the same mobility on SDS-PAGE as wild-type mature AEP was secreted. The role of dipeptidyl aminopeptidase (DPAPase) activity in AEP processing was also investigated. Mutations early in the -X-Ala-and -X-Pro-dipeptide stretch (Pro,, to Met which should prevent DPAPase processing and Al a,, to Val which should allow removal of only the first dipeptide) did not prevent synthesis of active mature AEP nor did use of the DPAPase inhibitor ProboroPro. Deletion of the entire dipeptide stretch (Ala,, to Pro, , ) resulted in intracellular accumulation of an AEP precursor, which surprisingly was not glycosylated, and little or no secretion of AEP-related polypeptides. Expression of AEP in wild-type and dpp1 dap2 Sacchammyces cerevisiae strains (lacking both the Golgi and vacuolar DPAPases) resulted in secretion of only mature AEP and no AEP precursors. Transit times and levels of AEP secretion were similar for both strains. These results indicate that the KEXZ-like cleavage after Lys, , , -Arg, , , , which yields mature active AEP can occur in the absence of DPAPase processing and that DPAPase processing is not necessary for secretion of mature active AEP.