In Archaea, type IV prepilins and prearchaellins are processed by designated signal peptidase III (SPaseIII) prior to their incorporation into pili and the archaellum, respectively. These peptidases belong to the family of integral membrane aspartic acid proteases that contain two essential aspartate residues of which the second aspartate is located in a conserved GxGD motif. To this group also bacterial type IV prepilin peptidases, Alzheimer disease-related secretases, signal peptide peptidases and signal peptide peptidase-like proteases in humans belong. Here we have performed detailed in vivo analyses to understand the cleavage activity of PibD, SPaseIII from the thermoacidophilic crenarchaeon Sulfolobus acidocaldarius. Using an already established in vivo heterologous system cleavage assay, we could successfully identify the key amino acid residues essential for catalysis of PibD. Furthermore, in trans complementation of a pibD S. acidocaldarius deletion mutant with PibD variants having substituted key amino acids has consolidated our observations of the importance of these residues in catalysis. Based on our data, we propose to re-define class III peptidases/type IV prepilin/prearchaellin peptidases as GxHyD group (rather than GxGD) of proteases [Hy-hydrophobic amino acid].