Prohormone convertase (PC)1/3 is a eukaryotic serine protease in the subtilase family that participates in the proteolytic maturation of prohormone and neuropeptide precursors such as proinsulin and proopiomelanocortin. Despite the important role of this enzyme in peptide synthesis, how PC1/3 activity is regulated is still poorly understood. Using ion exchange chromatography and two-dimensional gel electrophoresis we found that natural PC1/3 present in AtT-20 cells and bovine chromaffin granules, as well as recombinant PC1/3 secreted from overexpressing Chinese hamster ovary cells, exists as multiple ionic forms. Gel filtration and cross-linking studies revealed that protein oligomerization and aggregation contribute greatly to variability in surface charge. The most acidic forms of PC1/3 contained both inactive aggregates as well as oligomerized 87-kDa PC1/3 that exhibited stable activity which was partially latent and could be revealed by dilution. No such latency was observed for the more basic, 66/74-kDa forms of PC1/3. Fractions containing these species were stabilized by preincubation with micromolar concentrations of either fluorogenic substrate or peptides containing pairs of basic residues. In addition, the most active form of 87-kDa PC1/3, a probable homodimer, was activated by preincubation with these same peptides. Cleavage by PC1/3 is often the initiating step in the biosynthetic pathway for peptide hormones, implying that this is a natural step for regulation. Our data suggest that enzyme oligomerization and peptide stabilization represent important contributing factors for the control of PC1/3 activity within secretory granules.