C-terminal alpha-amidation is a structural feature essential to the biological activity of many peptide hormones. Peptidylglycine alpha-amidating mono-oxygenase (PAM; EC 1.14.17.3) catalyses conversion of glycine-extended peptide hormone precursors into their corresponding alpha-hydroxyglycine derivatives. This reaction is the first step in the C-terminal amidation process. We report here that in the presence of molecular O2, copper and PAM substrate, NN-dimethyl-1,4-phenylenediamine (DMPD) serves as the requisite electron donor for the mono-oxygenase, being oxidized in the process to a stable and highly chromophoric cation radical. By monitoring the rate of increase in absorbance at 515 nm, PAM activity can be easily followed. This provides a spectrophotometric assay for PAM, which represents the first continuous assay reported for this enzyme. DMPD-supported PAM-catalysed mono-oxygenation exhibits normal Michaelis-Menten kinetic behaviour. Steady-state kinetic studies established that both the ascorbate-supported and DMPD-supported PAM reactions exhibit apparent 'Ping Pong' kinetics. In addition, both electron donors give rise to similar pH profiles and identical inhibition patterns towards known competitive inhibitors of PAM. The stoichiometry between formation of the DMPD cation radical and the alpha-hydroxyglycine PAM product was determined to be 2:1, the value expected for a monooxygenase-catalysed reaction. The optimum pH for the DMPD-supported continuous PAM assay was found to be about 5.5. The major advantage of this assay over all previously reported methods is that it is continuous; thus accurate initial rates are easily obtained. Moreover, unlike previous assay methods, 125I-labelled or chromophorically modified substrates are not required. Kinetic parameters for a broad range of PAM substrates and inhibitors have been successfully obtained using this assay.