Protein acylation processes involve the covalent attachment of acyl moieties to the alpha- and epsilon-amino groups of polypeptide chains. The N-terminal blocking of proteins occurs in a wide range of eukariotic cells, where more than 50% of the cytosolic proteins can be N-alpha-acetylated. The acetylation which occurs during or after the biosynthesis of the polypeptide chains serves to protect the intracellular proteins from proteolysis. Food processing can also generate N-alpha-acetylated proteins and peptides. The mechanism underlying the intracellular catabolism of N-acetylated proteins has not yet been elucidated, however. It is generally assumed that two enzymes are involved in the hydrolysis of the N-terminal part of the proteins. The NH(2)-blocked peptides generated during proteolysis may be cleaved by an N-acylpeptide hydrolase (APH). This releases the N-terminal amino acid, which is in turn deacetylated by an aminoacylase, the most common of which is aminoacylase 1 (ACY 1). The corresponding free amino acid is therefore available for protein synthesis. Both APH and ACY 1 are cytoplasmic enzymes, which have been isolated from various mammalian tissues. APH belongs to a novel class of serine-type peptidases called the prolyl oligopeptidase (PROP) family. ACY 1 belongs to the M20 metalloenzyme family. In this review, the processes involved in alpha- and epsilon-acetylation and the catabolism of endogenous proteins and proteins involved in food processing are discussed. We then focus on the characteristics of the APH and ACY 1 enzymes involved in the final release of the free amino acids, which are essential to protein synthesis.