The physiological significance of multiple Y receptors has not been determined since until recently only one form of endogenous agonists was known, namely PYY1-36 and NPY1-36. Recently, a new molecular form of PYY was characterized as des(Tyr-Pro)PYY (PYY3-36 or PYY-II). Its ability to interact at various Y receptors was not characterized. Analytical chromatography of fresh canine colon extracts shows two peaks of immunoreactivity eluting in the positions of PYY-II and PYY1-36 (PYY). PYY-II was about 40% of the total PYY immunoreactivity indicating that it is one of the major forms of PYY expressing its biological activity. It is shown that PYY-II will not displace label from the Y1 receptors found on a human neuroblastoma cell line. It is further shown that PYY-II is as potent as PYY for the inhibition of pancreatic secretion, which must occur through Y2 receptors. The enzymatic removal of Tyr-Pro from PYY to form PYY-II must therefore regulate the relative expression of a non-selective agonist (PYY) to a highly selective Y2 agonist (PYY-II). Amino terminal processing of PYY represents a novel type of regulation of peptide hormone specificity. It has important biological implications for PYY and potential relevance for other peptide hormone receptor systems.