Serine carboxypeptidases have the ability to hydrolyze peptides as well as peptide amides. Previously, it has been demonstrated that Asn51 and Glu145 (in the protonated form) each donate a hydrogen bond to the alpha-carboxylate of peptide substrate. It is here demonstrated by characterization of carboxypeptidase Y derivatives, mutationally altered at positions 51 and 145, that the same groups are involved in the interaction with the C-terminal carboxyamide group of peptide amides. Asn51 donates a hydrogen bond to the C = O group of the substrate, and Glu145 (in the charged form) accepts one from the NH2 group of the substrate. Thus, the ionic state of Glu145 is different when peptides are hydrolyzed as compared with when peptide amides are hydrolyzed. This explains why Km for the hydrolysis of peptides increases with pH, whereas it remains constant for peptide amides. As a consequence, kcat/Km for the hydrolysis of peptide amides is higher than for the hydrolysis of peptides at pH > 8. At physiological pH, peptides and peptide amides are hydrolyzed with rates of the same order of magnitude; this is in accordance with reports describing that serine carboxypeptidases are involved in the degradation of biologically active peptide amides.