A series of experiments has been conducted to investigate the possibility that substrate channelling might occur in the bifunctional forms of enzymes carrying out C-terminal amidation, a post-translational modification essential to the biological activity of many neuropeptides. C-terminal amidation entails sequential action by peptidylglycine mono-oxygenase (PAM, EC 188.8.131.52) and peptidylamidoglycolate lyase (PGL, EC 184.108.40.206), with the mono-oxygenase catalysing conversion of a glycine-extended pro-peptide into the corresponding alpha-hydroxyglycine derivative, which is then converted by the lyase into amidated peptide plus glyoxylate. Since the mono-oxygenase and lyase reactions exhibit tandem reaction stereospecificities, channelling of the alpha-hydroxy intermediate might occur, as is the case for some other multifunctional enzymes. Selective inhibition of the mono-oxygenase domain by competitive ester inhibitors, as well as mechanism-based mono-oxygenase inactivation by the novel olefinic inhibitor 5-acetamido-4-oxo-6-phenylhex-2-enoate (N-acetylphenylalanyl acrylate), has little to no effect on the kinetic parameters of the lyase domain of the AE from Xenopus laevis. Similarly, inhibition of the lyase domain by the potent dioxo inhibitor 2,4-dioxo-5-acetamido-6-phenylhexanoate has little effect on the activity of the monooxygenase domain in the bifunctional enzyme. A series of experiments on intermediate accumulation and conversion were also carried out, along with kinetic investigations of the reactivities of the monofunctional and bifunctional forms of PAM and PGL towards substrates and inhibitors. Taken together, the results demonstrate the kinetic independence of the mono-oxygenase and lyase domains, and provide no evidence for substrate channelling between these domains in the bifunctional amidating enzyme.