Besides functioning as the plasma transporter of retinol and thyroxine, TTR (transthyretin) is a protease, cleaving apoA-I (apolipoprotein A-I) after a phenylalanine residue. In the present study, we further investigated TTR substrate specificity. By using both P-diverse libraries and a library of phosphonate inhibitors, a TTR preference for a lysine residue in P1 was determined, suggesting that TTR might have a dual specificity and that, in addition to apoA-I, other TTR substrates might exist. Previous studies revealed that TTR is involved in the homoeostasis of the nervous system, as it participates in neuropeptide maturation and enhances nerve regeneration. We investigated whether TTR proteolytic activity is involved in these functions. Both wild-type TTR and TTR(prot-) (proteolytically inactive TTR) had a similar effect in the expression of peptidylglycine alpha-amidating mono-oxygenase, the rate-limiting enzyme in neuropeptide amidation, excluding the involvement of TTR proteolytic activity in neuropeptide maturation. However, TTR was able to cleave amidated NPY (neuropeptide Y), probably contributing to the increased NPY levels reported in TTR-knockout mice. To assess the involvement of TTR proteolytic activity in axonal regeneration, neurite outgrowth of cells cultivated with wild-type TTR or TTR(prot-), was measured. Cells grown with TTR(prot-) displayed decreased neurite length, thereby suggesting that TTR proteolytic activity is important for its function as a regeneration enhancer. By showing that TTR is able to cleave NPY and that its proteolytic activity affects axonal growth, the present study shows that TTR has natural substrates in the nervous system, establishing further its relevance in neurobiology.