An insulin-degrading enzyme (IDE) from the cytoplasm of Drosophila Kc cells has been purified and characterized. The purified enzyme is a monomer with an s value of 7.2 S, an apparent Km for porcine insulin of 3 microM, and a specific activity of 3.3 nmol of porcine insulin degraded/(min.mg). N-Terminal sequence analysis of the gel-purified enzyme gave a single, serine-rich sequence. The Drosophila IDE shares a number of properties in common with its mammalian counterpart. The enzyme could be specifically affinity-labeled with [125I]insulin, has a molecular weight of 110K, and has a pI of 5.3. Although Drosophila Kc cells grow at room temperature, the optimal enzyme activity assay conditions parallel those of the mammalian IDE: 37 degrees C and a pH range of 7-8. The Drosophila IDE activity, like the mammalian enzymes, is inhibited by bacitracin and sulfhydryl-specific reagents. Similarly, the Drosophila IDE activity is insensitive to glutathione as well as protease inhibitors such as aprotinin and leupeptin. Insulin-like growth factor II, equine insulin, and porcine insulin compete for degradation of [125I]insulin at comparable concentrations (approximately 10(-6) M), whereas insulin-like growth factor I and the individual A and B chains of insulin are less effective. The high degree of evolutionary conservation between the Drosophila and mammalian IDE suggests an important role for this enzyme in the metabolism of insulin and also provides further evidence for the existence of a complete insulin-like system in invertebrate organisms such as Drosophila.