The majority of peptide hormones and neuropeptides are synthesized as precursors, which are cleaved in a sequence-specific and tissue-specific manner to yield the biologically active peptides. There has been considerable progress in the past ten years in understanding the nature and mechanism of action of the prohormone convertases that cleave these prohormones. Evidence from knockout technology and clinical examples of gene mutations has provided functional information on disruption of prohormone cleavage and the bioactivity of prohormones. There are specific examples of the clinical relevance of circulating prohormones, such as adrenocorticotrophin (ACTH) precursors and proinsulin. The central issues that still remain are: (1) What is the relative importance of each of the different processing pathways and processing enzymes in regulating hormone action? (2) How do the serum concentrations of prohormones compare with the mature hormone levels? (3) What are the biological consequences of prohormones in the circulation?