Proopiomelanocortin (POMC) is a neuropeptide precursor molecule which is translocated to the secretory pathway within neuroendocrine cells. It is cleaved by the action of endopeptidases to yield mature peptides like adrenocorticotrophic hormone (ACTH), beta-lipotrophin (beta-LPH), beta-endorphin. In this review we present evidence on the cleavage specificities and structure of endoproteases which cleave neuropeptide precursors at pairs of basic amino acids and on the identity and mode of action of exopeptidases. This information is derived from cloning of their corresponding cDNAs and subsequent expression within neuroendocrine cells; and also from biochemical studies. We discuss the intracellular targeting and sorting mechanisms of POMC within neuroendocrine cells. We also examine the tissue-specific post-translational processing of POMC within the anterior and intermediate lobes of the pituitary gland and within the central nervous system.