We have isolated a metallopeptidase from rat liver. The peptidase is primarily located in the mitochondrial intermembrane space, where it interacts non-covalently with the inner membrane. The enzyme hydrolyzes oligopeptides, the largest substrate molecule found being dynorphin A1-17; it has no action on proteins, and does not interact with alpha 2-macroglobulin, and can therefore be classified as an oligopeptidase. We term the enzyme oligopeptidase M. Oligopeptidase M acts similarly to thimet oligopeptidase (EC 3.4.24.15) on bradykinin and several other peptides, but hydrolyzes neurotensin exclusively at the -Pro+Tyr- bond (the symbol + is used to indicate a scissile peptide bond) rather than the -Arg+Arg- bond. The enzyme is inhibited by chelating agents and some thiol-blocking compounds, but differs from thimet oligopeptidase in not being activated by thiol compounds. The peptidase is inhibited by Pro-Ile, unlike thimet oligopeptidase, and the two enzymes are separable in chromatography on hydroxyapatite. The N-terminal amino acid sequence of rat mitochondrial oligopeptidase M contains 19 out of 20 residues identical with a segment of rabbit microsomal endopeptidase and 17 matching the corresponding segment of pig-soluble angiotensin II-binding protein. Moreover, the rat protein is recognized by a monoclonal antibody against rabbit soluble angiotensin II-binding protein, all of which is consistent with these proteins being species variants of a single protein that is a homologue of thimet oligopeptidase. The biochemical properties of the mitochondrial oligopeptidase leave us in no doubt that it is neurolysin (EC 3.4.24.16), for which no sequence has previously been reported, and which has not been thought to be mitochondrial.