The bifunctional enzyme prepilin peptidase (PilD) from Pseudomonas aeruginosa is a key determinant in both type-IV pilus biogenesis and extracellular protein secretion, in its roles as a leader peptidase and MTase. It is responsible for endopeptidic cleavage of the unique leader peptides that characterize type-IV pilin precursors, as well as proteins with homologous leader sequences that are essential components of the general secretion pathway found in a variety of Gram-negative pathogens. Following removal of the leader peptides, the same enzyme is responsible for the second posttranslational modification that characterizes the type-IV pilins and their homologues, namely N-methylation of the newly exposed N-terminal amino acid residue. This review discusses some of the work begun in order to answer questions regarding the structure-function relationships of the active sites of this unique enzyme.