Multistep proteolytic mechanisms are essential for converting proprotein precursors into active peptide neurotransmitters and hormones. Cysteine proteases have been implicated in the processing of proenkephalin and other neuropeptide precursors. Although the papain family of cysteine proteases has been considered the primary proteases of the lysosomal degradation pathway, more recent studies indicate that functions of these enzymes are linked to specific biological processes. However, few protein substrates have been described for members of this family. We show here that secretory vesicle cathepsin L is the responsible cysteine protease of chromaffin granules for converting proenkephalin to the active enkephalin peptide neurotransmitter. The cysteine protease activity was identified as cathepsin L by affinity labeling with an activity-based probe for cysteine proteases followed by mass spectrometry for peptide sequencing. Production of [Met]enkephalin by cathepsin L occurred by proteolytic processing at dibasic and monobasic prohormone-processing sites. Cellular studies showed the colocalization of cathepsin L with [Met]enkephalin in secretory vesicles of neuroendocrine chromaffin cells by immunofluorescent confocal and immunoelectron microscopy. Functional localization of cathepsin L to the regulated secretory pathway was demonstrated by its cosecretion with [Met]enkephalin. Finally, in cathepsin L gene knockout mice, [Met]enkephalin levels in brain were reduced significantly; this occurred with an increase in the relative amounts of enkephalin precursor. These findings indicate a previously uncharacterized biological role for secretory vesicle cathepsin L in the production of [Met]enkephalin, an endogenous peptide neurotransmitter.