We have cloned and characterized a human brain cDNA encoding a new metalloprotease that has been called aminopeptidase O (AP-O). AP-O exhibits a series of structural features characteristic of aminopeptidases, including a conserved catalytic domain with a zinc-binding site (HEXXHX18E) that allows its classification in the M1 family of metallopeptidases or gluzincins. The structural complexity of AP-O is further increased by the presence of an additional C-terminal domain 170 residues long, which is predicted to have an ARM repeat fold originally identified in the Drosophila segment polarity gene product Armadillo. This ARM repeat domain is also present in aminopeptidase B, aminopeptidase B-like, and leukotriene A4 hydrolase and defines a novel subfamily of aminopeptidases that we have called ARM aminopeptidases. Northern blot analysis revealed that AP-O is mainly expressed in the pancreas, placenta, liver, testis, and heart. Human AP-O was produced in Escherichia coli, and the purified recombinant protein hydrolyzed synthetic substrates used for assaying aminopeptidase activity. This activity was abolished by general inhibitors of metalloproteases and specific inhibitors of aminopeptidases. Recombinant AP-O also cleaved angiotensin III to generate angiotensin IV, a bioactive peptide of the renin-angiotensin pathway with multiple actions on diverse tissues, including brain, testis, and heart. On the basis of these results we suggest that AP-O could play a role in the proteolytic processing of bioactive peptides in those tissues where it is expressed.