The prevalence, diversity, and multiplicity of functions of pep tides in the nervous system are well known. However, we are only now approaching the point at which our knowledge about the biosynthesis of neuropeptides can provide us with insights into nervous system function, just as our knowledge of the enzymes involved in the biosynthesis of conventional neurotransmitters has so effectively done. To this end, we focus our review on one of the steps in peptide biosynthesis, peptide a-amidation. We summarize information obtained primarily over the past few years, because several previous reviews comprehensively cover earlier work on peptide IY. amidation (Bertelsen et al 1 990; Bradbury & Smyth 1 987a,b; Eipper & Mains 1988; Kreil 1 985; Mains et al 1 990). Several recent reviews have dealt more broadly with peptide processing (Chretien et al 1989; Harris 1989; Mains et al 1 990; Mains & Eipper 1 990; Schwartz 1 990; Sossin et al 1989; Steiner et al 1 989). Recent rapid progress on serine proteases iden tified by homology to the yeast endoprotease Kex2, which is known to play a role in IY.-mating factor biosynthesis, is also central to our developing understanding of neuropeptide biosynthesis (Bresnahan et al 1 990; Hatsuzawa et a1 1 990; Seidah et al 1 990, 1 991 ; Smeekens & Steiner 1990).