A human zinc metalloprotease (termed ACEH or ACE2) with considerable homology to angiotensin-converting enzyme (ACE) (EC 3.4.15.1) has been identified and subsequently cloned and functionally expressed. The translated protein contains an N-terminal signal sequence, a single catalytic domain with zinc-binding motif (HEMGH), a transmembrane region, and a small C-terminal cytosolic domain. Unlike somatic ACE, ACEH functions as a carboxypeptidase when acting on angiotensin I and angiotensin II or other peptide substrates. ACEH may function in conjunction with ACE and neprilysin in novel pathways of angiotensin metabolism of physiological significance. In contrast with ACE, ACEH does not hydrolyse bradykinin and is not inhibited by typical ACE inhibitors. ACEH is unique among mammalian carboxypeptidases in containing an HEXXH zinc motif but, in this respect, resembles a bacterial enzyme, Thermus aquaticus (Taq) carboxypeptidase (EC 3.4.17.19). Collectrin, a developmentally regulated renal protein, is homologous with the C-terminal region of ACEH but has no similarity with ACE and no catalytic domain. Thus, the ACEH protein may have evolved as a chimera of a single ACE-like domain and a collectrin domain. The collectrin domain may regulate tissue response to injury whereas the catalytic domain is involved in peptide processing events.