A new aspartic protease from Saccharomyces cerevisiae, with a high degree of similarity with yapsin 1 and yapsin 2 and a specificity for basic residue cleavage sites of prohormones, has been cloned. This enzyme was named yapsin 3. Expression of a C-terminally truncated non-membrane anchored yapsin 3 in yeast yielded a heterogeneous protein between 135-200 kDa which, upon treatment with endoglycosidase H, migrated as a 60 kDa form. Amino-acid analysis of the N-terminus of expressed yapsin 3 revealed two different N-terminal residues, serine-48 and phenylalanine-54, which followed a dibasic and a monobasic residue respectively. Cleavage of several prohormones by non-anchored yapsin 3 revealed a specificity distinct from that of yapsin 1.