A developmentally regulated carboxypeptidase was purified from hyphae of the dimorphic fungus Mucor racemosus. The enzyme, designated carboxypeptidase 3 (CP3), has been purified greater than 900-fold to homogeneity and characterized. The carboxypeptidase migrated as a single electrophoretic band in isoelectric focusing polyacrylamide gel electrophoresis (PAGE), with an isoelectric point of pH 4.4. The apparent molecular mass of the native enzyme was estimated by gel filtration to be 52 kDa. Sodium dodecyl sulfate (SDS)-PAGE under nonreducing conditions revealed the presence of a single polypeptide of 51 kDa. SDS-PAGE of CP3 reacted with 2-mercaptoethanol revealed the presence of two polypeptides of 31 and 18 kDa, indicating a dimer structure (alpha 1 beta 1) of the enzyme with disulfide-linked subunits. By using [1,3-3H]diisopropylfluorophosphate as an active-site labeling reagent, it was determined that the catalytic site resides on the small subunit of the carboxypeptidase. With N-carboben zoxy-L-phenylalanyl-L-leucine (N-CBZ-Phe-Leu) as the substrate, the Km, kcat, and Vmax values were 1.7 x 10(-4) M, 490 s-1, and 588 mumol of Leu released per min per mg of protein, respectively. CP3 was determined to be a serine protease, since its catalytic activity was blocked by the serine protease inhibitors diisopropylfluorophosphate, phenylmethylsulfonyl fluoride, and 3,4-dichloroi Socoumarin (DCI). The enzyme was strongly inhibited by the mercurial compound p-chloromercuribenzoate. The carboxypeptidase readily hydrolyzed peptides with aliphatic or aromatic side chains, whereas most of the peptides which contained glycine in the penultimate position did not serve as substrates for the enzyme. Although CP3 activity was undetectable in Mucor yeast cells, antisera revealed the presence of the enzyme in the yeast form of the fungus. The partial amino acid sequence of the carboxypeptidase was determined.