Rce1p and Ste24p are integral membrane proteins involved in the proteolytic maturation of isoprenylated proteins. Extensive published evidence indicates that Rce1p requires the isoprenyl moiety as an important substrate determinant. By contrast, we report that Ste24p can cleave both isoprenylated and non-prenylated substrates in vitro, indicating that the isoprenyl moiety is not required for substrate recognition. Steady-state enzyme kinetics are significantly different for prenylated versus nonprenylated substrates, strongly suggestive of a role for substratemembrane interaction in protease function. Mass spectroscopy analyses identify a cleavage preference at bonds where P1 is aliphatic in both isoprenylated and non-prenylated substrates, although this is not necessarily predictive. The identified cleavage sites are not at a fixed distance position relative to the C terminus. In this study, the substrates cleaved by Ste24p are based on known isoprenylated proteins (i.e. K-Ras4b and the yeast a-factor mating pheromone) and non-prenylated biological peptides (A and insulin chains) that are known substrates of the M16A family of soluble zinc-dependent metalloproteases. These results establish that the substrate profile of Ste24p is broader than anticipated, being more similar to that of the M16A protease family than that of the Rce1p CAAX protease with which it has been functionally associated.