A membrane-bound neutral carboxypeptidase B-like enzyme was solubilized from human placental microvilli with 3-[(3-cholamidopropyl)-dimethylammonio]-1-propanesulfonate (CHAPS) and purified to homogeneity by ion-exchange chromatography and affinity chromatography on arginine-Sepharose. It gave a single band on sodium dodecyl sulfate-polyacrylamide gel electrophoresis with an apparent Mr of 62,000 with or without reduction. The enzyme is a glycoprotein as shown by its high affinity for concanavalin A-Sepharose and reduction in mass to 47,600 daltons after chemical deglycosylation. It has a neutral pH optimum, is activated by CoCl2, and inhibited by o-phenanthroline, 2-mercaptomethyl-3-guanidinoethylthiopropanoic acid, or cadmium acetate, indicating it is a metallopeptidase. The enzyme cleaves arginine or lysine from the COOH terminus of synthetic peptides (e.g. Bz-Gly-Arg, Bz-Gly-Lys, Bz-Ala-Lys, dansyl-Ala-Arg, where Bz is benzoyl and dansyl is 5-dimethylaminonaphthalene-1-sulfonyl) as well as from several biologically active substrates: dynorphin A(1-13), Met5-Arg6-enkephalin (Km = 46 microM, kcat = 934 min-1), bradykinin (Km = 16 microM, kcat = 147 min-1), Met5-Lys6-enkephalin (Km = 375 microM, kcat = 663 min-1), and Leu5-Arg6-enkephalin (Km = 63 microM, kcat = 106 min-1). Although the enzyme shares some properties with other carboxypeptidase B-like enzymes, it is structurally, catalytically, and immunologically distinct from pancreatic carboxypeptidase A or B, human plasma carboxypeptidase N, and carboxypeptidase H ("enkephalin convertase"). To denote that the enzyme is membrane-bound, and to distinguish it from other known carboxypeptidases, we propose the name "carboxypeptidase M." Because of its localization on the plasma membrane and optimal activity at neutral pH, carboxypeptidase M could inactivate or modulate the activity of peptide hormones either before or after their interaction with plasma membrane receptors.