Specific proteolysis plays an important role in the terminal differentiation of keratinocytes in the epidermis and several types of proteases have been implicated in this process. The proprotein convertases (PCs) are a family of Ca2+-dependent serine proteases involved in processing and activation of several types of substrates. In this study we examined the expression and some potential substrates of PCs in epidermis. Four PCs are expressed in epidermis: furin, PACE4, PC5/6 and PC7/8. Furin is detected in two forms, either with or without the transmembrane domain, suggesting occurrence of post-translational cleavage to produce a soluble enzyme. In addition the furin active site has differential accessibility in the granular layer of the epidermis relative to the basal layer, whereas antibodies to the transmembrane domain stain both layers. These findings suggest that furin has access to different types of substrates in granular cells as opposed to basal cells. PC7/8, in contrast, is detected throughout the epidermis with antibodies to both the transmembrane and active site and no soluble form observed. A peptide PC inhibitor (dec-RVKR-CMK) inhibits cleavage of Notch-1, a receptor important in cell fate determination that is found throughout the epidermis. Profilaggrin, found in the granular layer, is specifically cleaved by furin and PACE4 in vitro at a site between the amino terminus and the first filaggrin repeat. This work suggests that the PCs play multiple roles during epidermal differentiation.