The prohormone-processing endoprotease (KEX2 gene product) of the yeast Saccharomyces cerevisiae is a membrane-bound, 135,000-dalton glycoprotein, which contains both asparagine-linked and serine- and threonine-linked oligosaccharide and resides in a secretory compartment. Analysis of mutant kex2 genes truncated at their 3' end indicates that carboxyl terminal domains of the enzyme are required for its proper localization within the cell. A human gene product, "furin," shares 50% identity with the catalytic domain of Kex2 protease and is, therefore, a candidate for a human prohormone-processing enzyme.