Epidermal growth factor (EGF) is a 53-amino-acid mitogenic polypeptide present in a variety of tissues and fluids including kidney, urine, and amniotic fluid. An EGF isoform, des-Arg53-EGF, has been identified in urine and is the earliest metabolite generated in target cells upon EGF binding. In this study, purified carboxypeptidase M efficiently released the COOH-terminal arginine residue from EGF with a Km = 56 microM, kcat = 388 min-1, and kcat/Km = 6.9 microM-1 min-1. When EGF was incubated with urine or amniotic fluid, des-Arg53-EGF was the only metabolite detected. This conversion was blocked by immunoprecipitation with specific antiserum to carboxypeptidase M or by 10 microM DL-2-mercaptomethyl-3-guanidinoethylthiopropanoic acid (a carboxypeptidase M inhibitor), indicating that the major EGF metabolizing enzyme in these fluids is carboxypeptidase M. When incubated on a confluent monolayer of Madin-Darby canine kidney (MDCK) cells, EGF was readily converted to a single metabolite, des-Arg53-EGF, by carboxypeptidase M. To investigate one possible functional consequence of this conversion, mitogenic activities of EGF and des-Arg53-EGF were tested. Both peptides were equipotent in stimulating [3H]thymidine incorporation in MDCK cells at all doses tested. In addition, inhibition of the conversion of EGF to des-Arg53-EGF by the carboxypeptidase M inhibitor did not affect the mitogenic potency of EGF. These data indicate that carboxypeptidase M, present in a variety of cells and biological fluids, can convert EGF to des-Arg53-EGF. However, in contrast to many other peptide hormones whose activity depends on a final carboxypeptidase processing step, removal of Arg53 of EGF is not required for its mitogenic activity.