Angiotensin-converting enzyme was solubilized from bovine lung with detergent and purified over 2300-fold to physical homogeneity by a combination of ammonium sulfate fractionation, molecular sieve chromatography, and ion exchange chromatography. The purified enzyme had an apparent molecular weight of 126,000 in both the denatured, and reduced, denatured forms as determined by sodium dodecyl sulfate polyacrylamide gel electrophoresis. The purified enzyme had a specific activity of 13.6 units/mg. It was inhibited by EDTA and activated by chloride ion. Chloride functioned as a nonessential activator by raising the Vmax 4.26-fold and lowering the KM 5.99-fold under saturating conditions. Under these conditions, the Vmax was 1.2 mumol/min/unit and the KM was 1.3 mM. Three series of peptides having the general structures, Hip-His-X, Hip-X-Leu, and Hip-X-His-Leu were synthesized and used to examine the binding specificity and substrate specificity of the enzyme for amino acids in the COOH-terminal (P'2), penultimate COOH-terminal (P'1), and antepenultimate COOH terminal (P1) peptide positions. These studies indicated that in terms of binding specificity, the relative importance of these three positions was P'2 > P'1 > P1, while the reverse order P1 > P'1 > P'2 was observed for the relative contribution to substrate specificity. Three peptides, Hip-His-D-Leu, Hip-D-His-Leu, and Hip-D-Phe-His-Leu, were also synthesized and used to examine the stereochemical requirements of the enzyme in terms of both peptide binding and hydrolysis. Hydrolysis was found to require an L amino acid in all three positions. In contrast, all three peptides bound to the enzyme.