The amino acid sequence of rat mast cell carboxypeptidase has been determined. The major form has 308 residues; a minor form has an additional (glutamyl) residue at the amino terminus that may indicate an alternate cleavage site during zymogen activation. The enzyme is homologous to pancreatic carboxypeptidases A and B, with conservation of the functional amino acid residues of the active site. The putative substrate binding site resembles that of carboxypeptidase A, although other structural features bear more similarity to carboxypeptidase B. Mast cell carboxypeptidase retains enzymatic activity toward a peptide substrate (angiotensin I) while bound within the granular matrix of the rat connective tissue mast cells. Evidence is presented to suggest that a cluster of positively charged lysyl and arginyl residues binds the enzyme to the negatively charged heparin of the granular matrix but leaves the active site exposed to bind and cleave peptide substrates.