Pz-peptidase is an endopeptidase that cleaves the synthetic substrate, 4-phenylazobenzyloxycarbonyl-Pro-Leu-Gly-Pro-Arg (Pz-peptide), which was originally developed for the assay of Clostridium histolyticum collagenase (Wunsch and Heidrich, Hoppe-Seyler’s Z. Physiol. Chem., 333, 149-151, 1963; Morales and Woessner, J. Biol. Chem., 252, 4855-4860, 1977). Pz-peptidase was purified from the culture filtrate of Bacillus licheniformis N22. The purified Pz-peptidase showed a molecular weight of 70,000 in SDS-polyacrylamide gel electrophoresis and 150,000 in gel filtration. Optimal pH for cleavage of Pz-peptide was 7.8. The Pz-peptidase activity was strongly inhibited by metal chelators such as EDTA and O-phenanthroline. Substrate specificity studies indicated that Pz-peptidase cleaved oligopeptides at the Xaa-Gly site in Xaa-Gly-Pro. However, Pz-peptidase failed to hydrolyze native collagen, denatured collagen, hemoglobin and casein.