Pituitary secretory vesicle enzymes involved in the processing of pro- opiomelanocortin (POMC, pro-ACTH/endorphin) were studied. A 70,000 mol wt. paired basic residue-specific pro-opiomelanocortin converting enzyme (PCE) has recently been characterized as a unique calcium activated aspartic protease. Cloning of this enzyme is now in progress. However, PCE does not cleave the tetrabasic residues of ACTH to form alpha-MSH (NAc ACTH 1-13 NH2). An acidic, calcium-activated serine protease has been isolated from bovine intermediate lobe secretory vesicles that is highly specific for the tetrabasic residue site of ACTH. This enzyme is enriched in intermediate versus anterior pituitary and may account for the differential processing of ACTH to alpha-MSH in these two lobes. In addition, a calcium activated neutral endoprotease that cleaves both paired basic residues of POMC and the tetrabasic residues of ACTH was detected in intermediate and anterior lobe secretory vesicle membranes. It's neutral pH optimum suggests that it may not be involved in the cleavage of ACTH in secretory vesicles which have an acidic internal pH, but may make the early cleavages of POMC in the Golgi. The inhibitor profile and substrate specificity indicate that it is a PC2-like enzyme, a mammalian member of the subtilisin-related serine protease family that is homologous to the yeast pro-alpha-mating factor, paired basic residue specific processing enzyme KEX-2. PC3, another member of this subtilisin family and PC2 were cloned from rat and their mRNAs were shown to be coordinately regulated with POMC mRNA in the intermediate lobe with bromocryptine or haloperidol treatment, agents which regulate secretion of POMC-derived peptides and POMC biosynthesis. This suggests that PC2 and PC3 may be candidate processing enzymes for POMC. The signal involved in the targeting of POMC into the regulated secretory pathway was also investigated. Truncated POMC/CAT constructs were transfected into endocrine AtT-20 cells. Intracellular localization of the expressed POMC-CAT fusion proteins by immunofluoreseence histochemistry and forskolin stimulated secretion studies indicate the first 26 amino acids of N-POMC, which forms a hairpin loop structure, stabilized by disulfide bridges contains the signal for targeting the prohormone to secretory vesicles.