The polyprotein of infectious bursal disease virus (IBDV), an avian birnavirus, is processed by the viral protease, VP4. Previous data obtained on the VP4 of infectious pancreatic necrosis virus (IPNV), a fish birnavirus, and comparative sequence analysis between IBDV and IPNV suggest that VP4 is an unusual eukaryotic serine protease that shares properties with prokaryotic leader peptidases and other bacterial peptidases. IBDV VP4 is predicted to utilize a serine-lysine catalytic dyad. Replacement of the members of the predicted catalytic dyad (Ser-652 and Lys-692) confirmed their indispensability. The two cleavage sites at the pVP2-VP4 and VP4-VP3 junctions were identified by N-terminal sequencing and probed by site-directed mutagenesis. Several additional candidate cleavage sites were identified in the C-terminal domain of pVP2 and tested by cumulative site-directed mutagenesis and expression of the mutant polyproteins. The results suggest that VP4 cleaves multiple (Thr/Ala)-X-Ala downward arrowAla motifs. A trans activity of the VP4 protease of IBDV, and also IPNV VP4 protease, was demonstrated by co-expression of VP4 and a polypeptide substrate in Escherichia coli. For both proteases, cleavage specificity was identical in the cis- and trans-activity assays. An attempt was made to determine whether VP4 proteases of IBDV and IPNV were able to cleave heterologous substrates. In each case, no cleavage was observed with heterologous combinations. These results on the IBDV VP4 confirm and extend our previous characterization of the IPNV VP4, delineating the birnavirus protease as a new type of viral serine protease.