A combination of protein engineering and substrate optimization was used to create variants of the serine protease, subtilisin BPN', which efficiently and specifically cleave a designed target sequence in a fusion protein. The broad substrate specificity of wild-type subtilisin BPN' is greatly restricted by substitution of the catalytic histidine-containing of the catalytic histidine 64 with alanine (H64A) so that certain histidine-containing substrates are preferentially hydrolysed (Carter, P., Wells, J.A. Science 237:394-399, 1987). The catalytic efficiency, (kcat/Km), of this H64A variant was increased almost 20-fold by judicious choice of substrate and by installing three additional mutations which increase the activity of wild-type subtilisin. The most favorable substrate sequence identified was introduced as a linker in a fusion protein between a synthetic IgG binding domain of Staphylococcus aureus protein A and Escherichia coli alkaline phosphatase. The fusion protein (affinity purified on an IgG column) was cleaved by the prototype H64A enzyme and its improved variant, efficiently and exclusively at the target site, to liberate an alkaline phosphatase product of the expected size and N-terminal sequence. Several features of H64A variants of subtilisin make them attractive for site-specific proteolysis of fusion proteins: they have exquisite substrate specificity on the N-terminal side of the cleavage site and yet are broadly specific on the C-terminal side; they can be produced in large quantities and remain highly active even in the presence of detergents, reductants (modest concentrations), protease inhibitors, at high temperatures, or when specifically immobilized on a solid support.