Carboxypeptidase M, a widely distributed membrane-bound carboxypeptidase that can regulate peptide hormone activity, was purified to homogeneity from human placenta (Skidgel, R. A., Davis, R. M., and Tan, F. (1989) J. Biol. Chem. 264, 2236-2241). The NH2-terminal 31 amino acids were sequenced, and two complementary oligonucleotide probes were synthesized and used to isolate a carboxypeptidase M clone from a human placental cDNA library. Sequencing of the cDNA insert (2009 base pairs) revealed an open reading frame of 1317 base pairs coding for a protein of 439 residues. The NH2-terminal protein sequence matched the deduced amino acid sequence starting with residue 14. Hydropathic analysis revealed hydrophobic regions at the NH2 and COOH termini. The NH2-terminal 13 amino acids probably represent part of the signal peptide, and the COOH-terminal hydrophobic region may act either as a transmembrane anchor or as a signal for attachment to a phosphatidylinositol glycan moiety. The carboxypeptidase M sequence contains six potential Asn-linked glycosylation sites, consistent with its glycoprotein nature. The sequence of carboxypeptidase M was 41% identical with that of the active subunit of human plasma carboxypeptidase N, 41% identical with bovine carboxypeptidase H (carboxypeptidase E, enkephalin convertase), and 15% with either bovine pancreatic carboxypeptidase A or B. Many of the active site residues identified in carboxypeptidases A and B, including all of the zinc-binding residues (2 histidines and a glutamic acid), are conserved in carboxypeptidase M. These data indicate that all of the metallocarboxypeptidases are related, but the nondigestive carboxypeptidases with more specialized functions, present in cell membranes, blood plasma, or secretory granules (i.e., carboxypeptidase M, carboxypeptidase N and carboxypeptidase H), are more closely related to each other (41-49% identity) than they are to carboxypeptidase A or B (15-20% identity).