We recently reported the isolation and some properties of an unusual enzyme called peptide amidase (Steinke, D. and Kula, M. R. Angew. Chem. Int. Ed. Engl. 1990, 29, 1139-1140). Here we describe the partial purification of the enzyme from the flavedo of orange fruits and discuss results of a detailed study of the substrate range of the peptide amidase, which is extremely wide and useful for a C-terminal enzymatic deprotection in peptide synthesis under very mild conditions. The substrate spectrum includes protected or unprotected peptide amides and N-protected amino acid amides. The chain length of the substrate peptide amide, as well as the amino acid composition, including the C-terminal amino acid side chain, are of minor importance. The peptide amidase is stereoselective with regard to the C-terminal position, since only L-amino acid amides are accepted as substrates, with the exception of proline. Notably, side chain amides are not deamidated. The peptide amidase is free of any proteolytic activity, which would hydrolyze internal peptide bonds of substrate peptides. In the penultimate position D-amino acids are tolerated; peptide modifications toward the N-terminal region do not abolish the enzymatic deamidation at the C-terminus.