Abstract Cidofovir (HPMPC) is a broad-spectrum antiviral agent, currently used to treat AIDS-related human cytomegalovirus retinitis. Cidofovir has recognized therapeutic potential for orthopox virus infections, although its use is hampered by its inherent low oral bioavailability. Val-Ser-cyclic HPMPC (Val-Ser-cHPMPC) is a promising peptide prodrug which has previously been shown by us to improve the permeability and bioavailability of the parent compound in rodent models ( Eriksson et al., 2008. Molecular Pharmaceutics 5, 598–609). Puromycin-sensitive aminopeptidase was partially purified from Caco-2 cell homogenates and identified as a prodrug activating enzyme for Val-Ser-cHPMPC. The prodrug activation process initially involves an enzymatic step where the l-Valine residue is removed by puromycin-sensitive aminopeptidase, a step that is bestatin-sensitive. Subsequent chemical hydrolysis results in the generation of cHPMPC. A recombinant puromycin-sensitive aminopeptidase was generated and its substrate specificity investigated. The k cat for Val-pNA was significantly lower than that for Ala-pNA, suggesting that some amino acids are preferred over others. Furthermore, the three-fold higher k cat for Val-Ser-cHPMPC as compared to Val-pNA suggests that the leaving group may play an important role in determining hydrolytic activity. In addition to its ability to hydrolyze a variety of substrates, these observations strongly suggest that puromycin-sensitive aminopeptidase is an important enzyme for activating Val-Ser-cHPMPC in vivo. Taken together, our data suggest that puromycin-sensitive aminopeptidase makes an attractive target for future prodrug design.