An enzyme that releases acylamino acid from amino terminal acylated peptides and proteins has been isolated from rat liver in a highly purified form bya six-step procedure comprising extraction from liver homogenate, ammonium-sulfate fractionation, heat treatment, chromatography on columns of DEAE-cellulose and hydroxylapatite and gel filtration on a Sepharose 6B column. About 1,500-fold purification was achieved from the liver homogenate. The purified enzyme preparation showed a single band on polyacrylamide gel disc electrophoresis. The enzyme specifically released acylamino acids from several amino terminal acylated peptides and proteins with different rates of hydrolysis depending on the acyl groups, terminal amino acid sequences and tertiary structure of the acyl protein substrates. The present enzyme may be useful for the removal of the N-terminal acylamino acid from some N-terminal blocked peptides and proteins in amino acid sequence analysis. The molecular weight of the purified enzyme was estimated to be 360,000-420,000 by gel filtration and sucrose density gradient ultracentifugation. Disc electrophoresis of the acylamino acid-releasing enzyme on SDS-polyacrylamide gel suggested that the enzyme consisted of five or six identical subunits having a subunit weight of about 75,000. The N-terminal residue of the subunit, which consisted of a single polypeptide chain, was glycine. Other properties of the enzyme, including isoelectric point, the effects of metal ions and several chemical reagents on the enzyme activity, pH optimum, and amino acid composition were also examined.