The human protein C precursor undergoes extensive co- and posttranslational modification during its biosynthesis in the liver. These modifications include glycosylation, gamma-carboxylation, and beta-hydroxylation of specific amino acids and endoproteolytic processing to remove the pre- and propeptides as well as the pair of basic amino acids which connect the light and heavy chains in the precursor. Previous studies with a recombinant mammalian expression system have indicated that the endopeptidase in several mammalian cell types which recognizes and cleaves this dibasic site has a substrate specificity for sites which also include a basic amino acid in the -4 position (Foster et al., 1990). Since the human protein C precursor has His154 in the -4 position, it is poorly and incompletely cleaved in BHK and several other mammalian cell lines and also apparently secreted from the liver as a mixed population of mature two-chain and precursor one-chain molecules. In the present study, a mammalian expression system has been used to study the effect of coexpressing the protein C precursor together with the yeast Kex2 endopeptidase which is known to recognize and process dibasic pairs within peptide precursors in yeast. Coexpression of the KEX2 gene resulted in complete conversion of the protein C precursor to the mature two-chain form. Amino-terminal sequencing of the cleavage products has indicated that the cleavage occurs in the correct location and that this site is preferentially recognized by the yeast endopeptidase within the context of the mammalian cell secretory pathway.