Caspase-14 is a developmentally regulated and tissue restricted member of the caspase family present in mammals. It is mainly found in epidermal keratinocytes and has been hypothesized to be involved in a tissue-specific form of cell senescence, leading to the differentiation of keratinocytes that form the cornified cell layer. However, the substrate specificity, activation mechanism, and function of this caspase have yet to be revealed. We report that caspase-14, in contrast to other caspases, is not produced in active form following expression in Escherichia coli but can be activated by high concentrations of kosmotropic salts. Moreover, proteolytic cleavage is also required since the kosmotropic salts were only effective on the cleaved enzyme. We propose that caspase-14 requires proteolytic cleavage within the catalytic domain, followed by dimerization and ordering of mobile active site loops, to generate a competent enzyme. In the presence of kosmotropic salt, we were able to determine the substrate specificities of mouse and human caspase-14. Surprisingly, the substrate preferences for the human and mouse enzyme are dissimilar. The results obtained with human caspase-14 classify this enzyme as a cytokine activator, but the mouse enzyme shows preferences similar to apical apoptotic caspases.