The post-translational processing and intracellular sorting of the proinsulin-converting enzyme carboxypeptidase H (CPH) was studied in isolated rat islets of Langerhans. Pulse-chase-radiolabelling experiments using sequence-specific antisera showed that CPH was synthesized initially as a 57-kDa glycoprotein which was processed to a 54-kDa mature form by proteolytic processing at the N-terminus. Processing of the CPH precursor occurred rapidly (t(1/2) = 30) after an initial delay of 15-30 min and the enzyme was secreted in parallel with the insulin-related peptides in response to glucose-stimulation within 1 h after radiolabelling. This indicated that the proteins were packaged into nascent secretory granules at approximately the same rate following synthesis. Conversion of proinsulin and the 57-kDa form was inhibited markedly by chase incubation of islets at 20 degrees C, indicating that maturation of both proteins occurs in a post-Golgi compartment. Affinity purification of the enzyme from insulinoma subcellular fractions showed that the 57-kDa form was associated with endoplasmic reticulum or Golgi elements, and the 54-kDa form was present in secretory granules. Structural analysis showed that the granule form of the enzyme had an N-terminal amino acid sequence beginning at residue 42 of rat CPH, thereby implicating cleavage of the precursor after the fourth Arg in a site containing five consecutive Arg residues. These findings indicate that post-translational processing of CPH is mediated by an endoprotease which cleaves at sites containing multiple basic amino acid residues upon segregation of the enzyme to the secretory granules.