A Ca2+-activated neutral protease was purified to homogeneity from an aquatic Phycomycete fungus, Allomyces arbuscula. It requires millimolar concentrations of Ca2+ for activation (1.8 to 2 mM for 50% activation). Sr2+ can replace Ca2+ but at higher concentrations (4 mM for 50% activation). The enzyme is a dimer of 40-kilodalton subunits and contains six cysteine residues, three of which are revealed only after the addition of micromolar concentrations of Ca2+; the other three are free. Enzyme activity is strongly inhibited by SH-group inhibitors and some trypsin inhibitors (leupeptin and alpha-N-tosyl-L-lysine chloromethyl ketone). The enzyme lacks general trypsinlike specificity, since substrates containing tryptic cleavage sites are not cleaved nor is enzyme activity inhibited by other trypsin inhibitors. The enzyme has many functional similarities to the extensively characterized mammalian and avian Ca2+-activated neutral proteases but differs in its substrate specificity, inhibition by alpha-N-tosyl-L-phenylalanine chloromethyl ketone, and subunit structure. It is, nevertheless, presumed that this enzyme has a similar high order of specificity and is involved in the regulation of a specific growth function.