An enzymatic activity capable of producing an alpha-amidated peptide product from its glycine-extended precursor has been identified in secretory granules of rat anterior, intermediate, and neural pituitary and bovine intermediate pituitary. High levels of endogenous inhibitors of this alpha-amidation activity have also been found in tissue homogenates. The alpha-amidation activity is totally inhibited by addition of divalent metal ion chelators such as diethyldithiocarbamate, o-phenanthroline, and EDTA; alpha-amidation activity is restored to above control levels upon addition of copper. The alpha-amidation reaction requires the presence of molecular oxygen. Of the various cofactors tested, ascorbic acid was the most potent stimulator of alpha-amidation. The alpha-amidation activity has a neutral pH optimum and is primarily soluble following several cycles of freezing and thawing. Kinetic studies with the bovine intermediate pituitary granule-associated activity demonstrated a linear Lineweaver-Burk plot when D-Tyr-Val-Gly was the varied substrate; the apparent Km and Vmax varied with the concentration of ascorbic acid. The substrate specificity of the alpha-amidation activity appears to be quite broad; the conversion of D-Tyr-Val-Gly into D-Tyr-Val-NH2 is inhibited by the addition of a variety of glycine-extended peptides.