We have performed the first biochemical characterization of a putative archaeal signal peptide peptidase (SppA Tk ) from the hyperthermophilic archaeon Thermococcus kodakaraensis KOD1. SppA Tk , comprised of 334 residues, was much smaller than its counterpart from Escherichia coli (618 residues) and harbored a single predicted transmembrane domain near its N terminus. A truncated mutant protein without the N-terminal 54 amino acid residues (⌬N54SppA Tk ) was found to be stable against autoproteolysis and was examined further. ⌬N54SppA Tk exhibited peptidase activity towards fluorogenic peptide substrates and was found to be highly thermostable. Moreover, the enzyme displayed a remarkable stability and preference for alkaline pH, with optimal activity detected at pH 10. ⌬N54SppA Tk displayed a K m of 240 ؎ 18 M and a V max of 27.8 ؎ 0.7 mol min ؊1 mg ؊1 towards Ala-Ala-Phe-4-methyl-coumaryl-7-amide at 80°C and pH 10. The substrate specificity of the enzyme was examined in detail with a FRETS peptide library. By analyzing the cleavage products with liquid chromatography-mass spectrometry, ⌬N54SppA Tk was found to efficiently cleave peptides with a relatively small side chain at the P-1 position and a hydrophobic or aromatic residue at the P-3 position. The positively charged Arg residue was preferred at the P-4 position, while substrates with negatively charged residues at the P-2, P-3, or P-4 position were not cleaved. When predicted signal sequences from the T. kodakaraensis genome sequence were examined, we found that the substrate specificity of ⌬N54SppA Tk was in good agreement with its presumed role as a signal peptide peptidase in this archaeon.