Pseudomonas exotoxin (PE) is cleaved within mammalian cells between Arg279 and Gly280 to generate an enzymatically active COOH-terminal fragment of 37 kDa which translocates to the cytosol and ADP-ribosylates elongation factor 2. A protease, with toxin cleaving activity, was prepared from beef liver and subsequently characterized. After achieving a 500-fold enrichment in several chromatographic steps, a soluble form of this protease was identified as a furin-like enzyme. It cleaved PE on the COOH-terminal side of the sequence of RQPR (amino acids 276-279) producing the same fragments as those generated within cells. Cleavage had a pH optimum of 5.0-5.5, was inhibited by EDTA or p-hydroxymercuribenzoate but not by O-phenanthroline,N-ethylmaleimide, trans-epoxysuccinyl-L-leukcylamido-(4-guanidino)-butane, or PMSF (or other well known inhibitors of serine proteases). The beef protease cleaved PE with an apparent Km of 7 microM. A mutant form of PE, PEala281, was cleaved at the same site, with the same pH optimum, a similar Km (9 microM) but with a Vmax 150 times faster than was seen with the native toxin. Mutational analysis of the amino acids located just before the site of cleavage, confirmed the importance of arginines at P-1 and P-4. It was also noted that the introduction of a dibasic pair at 278-279 did not increase toxicity or appreciably improve the rate of cleavage. Unnicked diphtheria toxin (DT) was also cleaved by the beef protease; cleavage was on the COOH-terminal side of the sequence RVRR (amino acids 190-193), was seen at pH values ranging from 5.5 to 8.5 and had an optimum at pH 8.0. Recombinant furin cleaved PE, PEala281, and DT with the same characteristics as the beef protease. In addition, Western blot analysis revealed that anti-furin antibodies reacted specifically with components in the beef protease preparation. Immunodepletion experiments showed that all toxin-cleavage activity could be removed from the beef protease using anti-furin antibodies. The relevance of furin-mediated cleavage was further assessed by adding nicked toxins to intact cells. Nicked PE and DT both killed cells at a faster rate than their unnicked counterparts.