Renin, which catalyzes the initial proteolytic cleavage reaction in the production of angiotensins, is first synthesized as a zymogen, prorenin, and requires the proteolytic removal of an amino-terminal prosegment for activation in vivo. The lysosomal hydrolase cathepsin B has been proposed as a prorenin processing enzyme based on reports of its co-localization with renin in the secretory granules of certain tissues and its ability to activate prorenin in vitro. In the current study, scanning mutagenesis was used to identify the amino acids which determine the site selectivity of prorenin cleavage by human cathepsin B in vitro. Co-expression assays in AtT-20 cells were also used to test for the ability of cathepsin B to cleave human prorenin within cells. Our results suggest that a basic lysine residue at the -2 position from the cleavage site is required for cathepsin B cleavage of prorenin in vitro and that the structure of prorenin itself may account for the selection of the proper cleavage site. In addition, although cathepsin B appears to be correctly sorted to lysosomes, the enzyme exhibits prorenin processing activity in transfected AtT-20 cells, raising the question of the cellular localization in which the processing event occurs.