The specificity of penicillopepsin was investigated with a number of different substrates. In agreement with earlier work (1), no action was observed on di- and tripeptide and ester substrates. However, the pepsin substrate carbobenzoxyglycylglycylphenylalanylphenylalanine 3-(4-pyridyl)propyl-1 ester was hydrolyzed between the two phenylalanine residues. No cleavage of homopolymers of glycine, alanine, and glutamic acid and the random copolymer of glutamic acid and tyrosine was observed. Polymers of lysine, lysine and tyrosine (2:1), and lysine, glutamic acid, and tyrosine (13:20:1) were, however, hydrolyzed giving mainly tripeptides to pentapeptides. Polylysine hydrolysis showed a pH dependence centering about a group of pK between 3 and 4. In glucagon and the S-sulfo B-chain of insulin, penicillopepsin hydrolyzed the same peptide bonds as the other acidic proteases, including pepsin and rennin, with very few exceptions. There are, however, distinct differences between the action of penicillopepsin and that of other proteases of low specificity. Peptide bonds which have a hydrophobic amino acid in the P1′ position (as defined by Berger and Schechter, Ref. 2) are preferentially cleaved by penicillopepsin. A kinetic study of the hydrolysis of bovine serum albumin showed very high rate constants for the initial cleavages. The present study shows the requirement for an extended binding site in penicillopepsin.