The subtilisin-like prohormone convertase SPC3 is likely to play a role in the biosynthesis of a variety of biologically active peptides. SPC3 undergoes a series of posttranslational processing events during its biosynthesis. Multiple forms have been identified that show varying degrees of truncation at the carboxyl terminus. In this study we show that the 86-kDa form of recombinant SPC3 with an intact carboxyl terminus can undergo rapid carboxyl-terminus truncation to produce a 64-kDa form. We have defined the optimal conditions for carboxyl-terminus truncation in vitro. The carboxyl-terminus truncation reaction was less calcium sensitive, active over a broader pH range, and showed differences in inhibitor sensitivity compared with the enzymatic activities of full-length and truncated forms of SPC3 toward a fluorescent peptide substrate. Increases in enzymatic activity of 86-kDa SPC3 were also measured over a time frame consistent with conversion to the 64-kDa form. However, similar specific activities for both forms of the enzyme suggest such activity increases may not be due to carboxyl-terminus truncation. The different enzymatic properties of the major molecular forms of SPC3 highlight the importance of understanding the molecular events regulating carboxyl-terminal processing of this endoprotease.