We have isolated a novel acidic amino-acid-specific proteinase from Streptomyces fradiae ATCC 14544, using benzyloxycarbonyl-L-Phe-L-Leu-L-Glu-p-nitroanilide (Z-Phe-Leu-Glu-pNA) as a substrate. A proteinase, which we propose to call SFase, was purified from the culture filtrate by salting out, repeated S-Sepharose chromatography, and affinity chromatography (CH-Sepharose-Phe-Leu-D-Glu-OMe). The purified enzyme showed a single band having an apparent molecular weight of 19,000 on sodium dodecyl sulfate polyacrylamide gel electrophoresis. When synthetic peptides were used as substrates, SFase showed high specificity for Z-Phe-Leu-Glu-pNA. Comparison with nitroanilides of glutamic acid and aspartic acid as substrates revealed that the reactivity was about 10-fold higher for a glutamyl bond than an aspartyl bond. SFase selectively hydrolyzed the -Glu-Ala-bond of two glutamyl bonds in the oxidized insulin B-chain within the initial reaction time until the starting material was completely digested. Diisopropylfluorophosphate and benzyloxycarbonyl-Phe-Leu-Glu chloromethylketone completely inhibited SFase, while metalloproteinase inhibitors, such as EDTA and o-phenanthrolin, did not inhibit the enzyme. The findings indicate that SFase can be classified as a serine proteinase, and is highly specific for a glutamyl bond in comparison with an aspartyl bond. To elucidate the complete primary structure and precursor of SFase, its gene was cloned from genomic DNA of the producing strain, and the nucleotide sequence was determined. Consideration of the N- and C-terminal amino-acid sequences of the mature protein of SFase indicates that it consists of 187 amino acids, which follows a prepropeptide of 170 residues. In comparison with the acidic amino-acid-specific proteinase from Streptomyces griseus (Svendsen, I., Jensen, M.R. and Breddam, K. (1991) FEBS Lett. 292, 165-167), SFase had 82% homology in the amino acid sequence. The processing site for maturation of SFase was a unique sequence (-Glu-Val-), so that the propeptide could be released by cleavage of the peptide bond between Glu and Val.