Vibrio fischeri cells are the sole colonists of a specialized light organ in the mantle cavity of the sepiolid squid Euprymna scolopes. The process begins when the bacteria aggregate in mucus secretions outside the light organ. The cells eventually leave the aggregate, enter the light organ, and encounter a rich supply of peptides. The need to dissociate from mucus and presumably utilize peptides led us to hypothesize that protease activity is integral to the colonization process. Protease activity associated with whole cells of Vibrio fischeri strain ES114 was identified as the product of a putative cell membrane-associated aminopeptidase (PepN). To characterize this activity, the aminopeptidase was cloned, overexpressed, and purified. Initial steady-state kinetic studies revealed that the aminopeptidase has broad activity, with a preference for basic and hydrophobic side chains and k(cat) and K(m) values that are lower and smaller, respectively, than those of Escherichia coli PepN. A V. fischeri mutant unable to produce PepN is significantly delayed in its ability to colonize squid within the first 12 h, but eventually it establishes a wild-type colonization level. Likewise, in competition with the wild type for colonization, the mutant is outcompeted at 12 h postinoculation but then competes evenly by 24 h. Also, the PepN-deficient strain fails to achieve wild-type levels of cells in aggregates, suggesting an explanation for the initial colonization delay. This study provides a foundation for more studies on PepN expression, localization, and role in the early stages of squid colonization.