Extracts from BSC-40 cells infected with vaccinia recombinants expressing either the yeast KEX2 prohormone endoprotease or a human structural homologue (fur gene product) contained an elevated level of a membrane-associated endoproteolytic activity that could cleave at pairs of basic amino acids (-LysArg- and -ArgArg-). The fur-directed activity (furin) shared many properties with Kex2p including activity at pH 7.3 and a requirement for calcium. By using antifurin antibodies, immunoblot analysis detected two furin translation products (90 and 96 kD), while immunofluorescence indicated localization to the Golgi apparatus. Coexpression of either Kex2p or furin with the mouse beta-nerve growth factor precursor (pro-beta-NGF) resulted in greatly enhanced conversion of the precursor to mature nerve growth factor. Thus, the sequence homology shared by furin and the yeast KEX2 prohormone processing enzyme is reflected by significant functional homology both in vitro and in vivo.