The activities of microsomal alanylaminopeptidase (APM EC 126.96.36.199) and of dipeptidyl dipeptidase IV (DPP IV EC 188.8.131.52) were histochemically studied in frozen sections of normal skin, seborrheic keratosis, basal cell carcinoma, solar keratosis, Bowen's disease and squamous cell carcinoma using amino acid- or peptide-4-methoxy-2-naphthylamides as specific chromogenic substrates. Compared to biochemical and immunohistochemical methods, the histochemical technique used in this study allows distinct localization of protease activity within the tumor tissue and the tumor-associated stroma. Strong APM activity was detectable only in the stroma of basal cell carcinoma, a result which reflects the particular tumor-stroma interaction of this semimalignant tumor. APM activity was not detectable in either healthy epidermis or the tumor parenchyma. Altered activity of DPP IV was found in the tumor cells as well as in the surrounding connective tissue: precancerous dermatoses and basal cell carcinomas had higher levels of DPP IV-activity than normal skin or benign seborrheic keratosis. Poorly differentiated malignant squamous cell carcinomas, however, showed no histochemically detectable DPP IV-activity at all. This result is in line with reports of decreased activity of this enzyme in cases of malignancy.