Dipeptidyl-peptidase IV (DPP IV/CD26) has a dual function as a regulatory protease and as a binding protein. Its role in the inactivation of bioactive peptides was recognized 20 years ago due to its unique ability to liberate Xaa-Pro or Xaa-Ala dipeptides from the N-terminus of regulatory peptides, but further examples are now emerging from in vitro and vivo experiments. Despite the minimal N-terminal truncation by DPP IV, many mammalian regulatory peptides are inactivated--either totally or only differentially--for certain receptor subtypes. Important DPP IV substrates include neuropeptides like neuropeptide Y or endomorphin, circulating peptide hormones like peptide YY, growth hormone-releasing hormone, glucagon-like peptides(GLP)-1 and -2, gastric inhibitory polypeptide as well as paracrine chemokines like RANTES (regulated on activation normal T cell expressed and secreted), stromal cell-derived factor, eotaxin and macrophage-derived chemokine. Based on these findings the potential clinical uses of selective DPP IV inhibitors or DPP IV-resistant analogues, especially for the insulinotropic hormone GLP-1, have been tested to enhance insulin secretion and to improve glucose tolerance in diabetic animals. Thus, DPP IV appears to be a major physiological regulator for some regulatory peptides, neuropeptides, circulating hormones and chemokines.