Angiotensin I-converting enzyme (ACE) is a type I transmembrane protein composed of two domains (N and C domains) which undergoes a post-translational proteolytic cleavage in mammalian cells to release the soluble ectodomain. The protease involved in ACE cleavage-secretion (ACE-secretase) is not well characterised and eludes isolation: the presence of a yeast homologue, thus more amenable to genetic manipulation, would facilitate its identification. We have expressed a secreted form of the ACE C domain, lacking the C-terminal membrane anchor (C domain Δ C O O H ), and the membrane-anchored C domain (C domain) in the yeast Pichia pastoris by fusion to prepro-α-factor. Immunofluorescent labelling localises the ACE C domain to the periphery of yeast cells but not C domain Δ C O O H , however, expression of both C domain and C domain Δ C O O H produced soluble enzymes in the culture medium. Immunocharacterisation of the two soluble forms of the C domain indicates a proteolytic cleavage of the membrane-bound C domain to produce the soluble counterpart. Thus ACE undergoes a proteolytic cleavage in yeast.