We previously described a caspase-like activity, which we termed KIPase that is implicated in the turnover of the mammalian cell cycle regulator p27(KIP1). KIPase cleaves a tetra-peptide substrate, Ac-DPSD-AMC, which mimics the target site in p27(KIP1), and inhibitors based on this tetra-peptide are ineffective against other known caspases. Here we describe the purification and characterization of KIPase, and trace its activity to the beta(1) subunit of the 20S proteasome. Further analyses revealed that the activity of the beta(1) subunit is up-regulated as cells enter the cell cycle without concomitant change in the levels of the proteasome beta(1), beta(2) or beta(5) subunits. To our knowledge, this is the first description of cell cycle regulation of the caspase-like activity of the 20S proteasome.