We have cloned and expressed the 3' region of the Mason-Pfizer monkey virus pro gene in Escherichia coli. The recombinant 26-kDa precursor undergoes rapid self-processing both in E. coli and in vitro at the NH2 terminus, yielding a proteolytically active 17-kDa protein, p17. This initial cleavage is followed in vitro by a much slower self-processing that leads to emergence of proteolytically active p12 and a COOH-terminal cleavage product p5. We have found the NH2-terminal processing site of both the p17 and p12 to be identical and similar to the amino terminus of the mouse mammary tumor virus proteinase. We have also identified the COOH-terminal processing site of the p12 form. Using purified recombinant proteins and synthetic oligopeptide substrates based on naturally occurring retroviral processing sites, we have determined the enzymatic activity and specificity of the Mason-Pfizer monkey virus proteinase to be more closely related to that of myeloblastosis-associated virus proteinase rather than that of the Human immunodeficiency virus type 1 proteinase. Inhibition studies using peptide inhibitors support these results.