Vacuolar processing enzymes (VPEs) are cysteine proteinases responsible for maturation of various vacuolar proteins in plants. A larger precursor to VPE synthesized on rough endoplasmic reticulum is converted to an active enzyme in the vacuoles. In this study, a precursor to castor bean VPE was expressed in a pep4 strain of the yeast Saccharomyces cerevisiae to examine the mechanism of activation of VPE. Two VPE proteins of 59 and 46 kDa were detected in the vacuoles of the transformant. They were glycosylated in the yeast cells, although VPE is not glycosylated in plant cells in spite of the presence of two N-linked glycosylation sites. During the growth of the transformant, the level of the 59 kDa VPE increased slightly until a rapid decrease occurred after 9 h. By contrast, the 46 kDa VPE appeared simultaneously with the disappearance of the 59 kDa VPE. Vacuolar processing activity increased with the accumulation of the 46 kDa VPE, but not of the 59 kDa VPE. The specific activity of the 46 kDa VPE was at a similar level to that of VPE in plant cells. The 46 kDa VPE instead of proteinase A mediated the conversion of procarboxypeptidase Y to the mature form. This indicates that proteinase A responsible for maturation of yeast vacuolar proteins can be replaced functionally by plant VPE. These findings suggest that an inactive VPE precursor synthesized on the endoplasmic reticulum is transported to the vacuoles in the yeast cells and then processed to make an active VPE by self-catalytic proteolysis within the vacuoles.