Exendin-4 is a naturally occurring 39 amino acid peptide that is useful for the control of Type 2 diabetes. Recombinant Exendin-4, with an extra glycine at the carboxy-terminus (Exdgly), was expressed in the methylotropic yeast Pichia pastoris. A high proportion of the Exdgly molecules secreted into medium were found to be clipped, lacking the first two amino acids (His-Gly) from the N-terminus. Disruption of the A pastoris homolog of the Saccharomyces cerevisiae dipeptidyl aminopeptidase (STE13) gene in Pichia genome resulted in a clone that expressed N-terminally intact Exdgly. Elimination of N-terminal clipping enhanced the yield and simplified the purification of Exdgly from P. pastoris culture supernatant. (C) 2008 Elsevier Inc. All rights reserved.