Factor IX is synthesized as a precursor polypeptide which requires proteolytic cleavage of the propeptide for functional activity. Expression of factor IX at high levels in Chinese hamster ovary (CHO) cells results in the secretion of a mixture of profactor IX and mature factor IX. We have studied whether the processing of profactor IX may be mediated by the recently discovered subtilisin-like serine proteases PACE/furin and/or PACE4. Co-transfection of a PACE expression vector with a profactor IX expression vector resulted in the secretion of fully processed factor IX. In contrast, co-transfection of a PACE4 expression vector with a profactor IX expression vector did not increase processing of profactor IX to the mature form. A factor IX Arg-to-Thr mutation at the P1 position (residue 39) destroyed the ability for PACE to process profactor IX. Amino-terminal sequence analysis demonstrated that processing mediated by PACE occurred at the authentic site within profactor IX. The specificity of profactor IX processing by PACE was also evaluated by transfection of a vector encoding the serine protease inhibitor alpha 1-antitrypsin. Expression of wild-type alpha 1-antitrypsin, which does not inhibit PACE, did not influence processing of profactor IX mediated by co-expression of PACE. In contrast, the alpha 1-antitrypsin Pittsburgh mutant, which inhibits PACE, inhibited profactor IX processing activity mediated by transfected PACE as well as the endogenous CHO cell propeptide processing enzyme. Pulse-chase labeling indicated that PACE processed profactor IX late within the secretory pathway, although a secreted soluble mutant PACE was also capable of processing profactor IX in the conditioned medium. The results implicate PACE as a candidate for the enzyme that processes profactor IX in vivo.