Proteolysis plays a key role in regulating the levels and activity of peptide hormones. Characterization of the proteolytic pathways that cleave peptide hormones is of basic interest and can, in some cases, spur the development of novel therapeutics. The lack, however, of an efficient approach to identify endogenous fragments of peptide hormones has hindered the elucidation of these proteolytic pathways. Here, we apply a mass spectrometry (MS) based peptidomics approach to characterize the intestinal fragments of peptide histidine isoleucine (PHI), a hormone that promotes glucose-stimulated insulin secretion (GSIS). Our approach reveals a proteolytic pathway in the intestine that truncates PHI at its C-terminus to produce a PHI fragment that is inactive in a GSIS assay, a result that provides a potential mechanism of PHI regulation in vivo. Differences between these in vivo peptidomics studies and in vitro lysate experiments, which showed N- and C-terminal processing of PHI, underscore the effectiveness of this approach to discover physiologically relevant proteolytic pathways. Moreover, integrating this peptidomics approach with bioassays (i.e., GSIS) provides a general strategy to reveal proteolytic pathways that may regulate the activity of peptide hormones.