Regulation of PACE propeptide-processing activity: requirement for a post-endoplasmic reticulum compartment and autoproteolytic activation.

PACE (paired basic amino acid cleaving enzyme) is a subtilisin-like serine protease involved in processing of propeptides in the constitutive secretory pathway. We here demonstrate that the transmembrane and cytoplasmic domains of PACE are required for retention in the secretory pathway but not for propeptide-cleaving activity. Addition of the endoplasmic reticulum retention signal Lys-Asp-Glu-Leu (KDEL) to the carboxyl terminus of the truncated molecule resulted in intracellular retention of the protein and loss of activity, indicating that the endoplasmic reticulum is an inappropriate environment for propeptide processing. In addition, mutation of a consensus PACE cleavage site within the amino-terminal region prevented processing of PACE to a mature form and destroyed activity. These data indicate that PACE is synthesized as a proprotein which requires autoproteolytic removal of an 81-residue pro sequence for optimal activity. A mutant form of PACE that lacked the pro sequence was nonfunctional, and addition of a pro sequence from a homologous subtilisin-like serine protease, PC2, did not restore activity. By analogy to the bacterial subtilisin family, the propeptide of PACE may guide the folding of PACE into an active enzyme.