The alpha-amidating reaction of peptide hormones is a two-step process which is catalyzed by peptidylglycine alpha-hydroxylating monooxygenase (PHM) and peptidylhydroxyglycine N-C lyase (PHL). There are three types of mRNA for these amidating enzymes in Xenopus laevis, namely AE-I, AE-II and AE-III. AE-I encodes only PHM and AE-III encodes both PHM and PHL. AE-II seems to encode subtypes of both PHM and PHL. While AE-II mRNA is present in high amounts in frog skin, the actual enzymes originating from AE-II have not been detected. When we expressed AE-II in cultured insect-cells using the baculovirus expression vector system, the expressed enzyme was specifically localized to the membrane fraction due to its hydrophobic transmembrane domain. Alternatively, when the transmembrane-domain-deleted AE-II (Met1-Ile731) was expressed, the enzyme was secreted into the culture medium; this secreted enzyme was purified to homogeneity by a simple two-step procedure. We have verified that the reaction product of the purified enzyme was the amidated peptide, indicating that AE-II has the ability to catalyze the entire amidating reaction.