The hydrolysis of substance P is catalyzed by purified rabbit lung angiotensin-converting enzyme (peptidyldipeptide hydrolase, EC 3.4.15.1). The kcat/Km for the reaction at 37 degrees is 3.3 +/- 0.3 X 10(3) M-1 sec-1, which is 60 times less than that which has been reported for the hydrolysis of angiotensin I. The initial site of hydrolysis is the antipenultimate peptide bond, which generates the tripeptide amide (Gly-Leu-Met-NH2). This hydrolysis is inhibited by the angiotensin-converting enzyme inhibitors captopril, MK-422, and EDTA, and is dependent on the concentration of chloride ion. Both captopril and MK-422 potentiate the substance P-induced stimulation of salivation in rats. Thus, angiotensin-converting enzyme may be one of the enzymes that degrade substance P in vivo.