Islet amyloid polypeptide (IAPP) (amylin), the major component of islet amyloid, is produced by cleavage at the COOH- and NH(2)-termini of its precursor, proIAPP, likely by the beta-cell prohormone convertases (PC) 1/3 and PC2. Mice lacking PC2 can process proIAPP at its COOH- but not its NH(2)-terminal cleavage site, suggesting that PC1/3 is capable of initiating proIAPP cleavage at its COOH-terminus. To determine the precise role of PC1/3 in proIAPP processing, Western blot analysis was performed on islets isolated from mice lacking PC1/3 (PC1/3(-/-)). These islets contained not only fully processed IAPP as in PC1/3(+/+) islets, but also elevated levels of a COOH-terminally unprocessed intermediate form, suggesting impaired processing at the COOH-terminus. Next, GH3 cells that do not normally express proIAPP or detectable levels of PC1/3 or PC2 were cotransduced with adenoviruses expressing rat proIAPP and either PC2 or PC1/3. As expected, in GH3 cells transduced to express only proIAPP, no processing was observed. Coexpression of proIAPP and PC2 resulted in production of mature IAPP, whereas in cells that coexpressed proIAPP and PC1/3 only a 6-kDa intermediate was produced. We conclude that PC1/3 is important for processing of proIAPP at the COOH-terminus, but in its absence, PC2 can initiate complete processing of proIAPP to IAPP by cleaving the precursor at either its NH(2)- or COOH-terminal cleavage sites.