Metallocarboxypeptidases perform many functions, ranging from the digestion of food to the selective processing of neuroendocrine peptide hormones and neurotransmitters (1). Altogether, there are 12 known members of the metallocarboxypeptidase gene family, which are further divided into two subgroups based on amino acid sequence similarities. Members of each subgroup share approximately 30 -60% amino acid sequence identity with other members of the same group, but typically only 15-25% amino acid sequence identity with members of the other subgroup (1). The two groups also differ in their general function; members of the carboxypeptidase A/B subgroup are typically digestive enzymes, while members of the subgroup containing carboxypeptidase E are referred to as "regulatory" enzymes (1, 2). Other members of the carboxypeptidase E subgroup include carboxypeptidases M, N, D, and Z, and proteins designated CPX-1, CPX-2, and AEBP-1 (3-9). Except for the latter three proteins, which are not active toward standard carboxypeptidase substrates and have been hypothesized to function as binding proteins, all of the other members of this subfamily cleave C-terminal Arg from small synthetic peptides.Carboxypeptidase Z (CPZ) 1 was discovered during a search for novel carboxypeptidases that could compensate for defective carboxypeptidase E in Cpe fat /Cpe fat mice (6, 10). These mice lack carboxypeptidase E but are still capable of a reduced level of processing of neuroendocrine peptides (11, 12). However, based on the non-neuroendocrine tissue distribution of CPZ, it is unlikely that this enzyme plays a role in neuroendocrine peptide processing. For example, in brain, CPZ is primarily expressed in the leptomeningeal cells and is not detectable in neurons (13). Furthermore, the enzymatic properties of CPZ are not consistent with a role for this enzyme in the processing of peptides within the secretory pathway (6, 14). Most importantly, CPZ is essentially inactive at the acidic pH values of the regulated secretory vesicles (14). Thus, it is likely that CPZ performs another role, possibly outside the cell. CPZ is predicted to be secreted from cells based on the presence of an N-terminal signal sequence (6, 13). When expressed in insect Sf9 cells using the baculovirus system, CPZ was not detected in the medium, although enzyme activity was detected on the cell surface despite the absence of a conventional membrane-binding domain (6).CPZ is unique among the members of the metallocarboxypeptidase family in that CPZ contains a cysteine-rich domain that has amino acid sequence identity with proteins that bind Wnt/wingless, such as the frizzled receptors, frzb, sizzled, and several other proteins (15)(16)(17)(18)(19)(20)(21)(22). This cysteine-rich domain within CPZ is highly conserved between the human and rat proteins, suggesting that it is functional. Although many of the Wnt-binding proteins function as receptors with Wnt being the ligand that initiates the signal transduction events, several Wnt-binding proteins are thought to bin...