Mast-cell carboxypeptidase A is stored in the secretory granule and is released, together with a range of other inflammatory mediators, upon mast-cell degranulation. Carboxypeptidase A, like all mast-cell proteases, is stored in the granule as an active enzyme (i.e. with its propeptide removed). Although the processing mechanisms for the other classes of mast-cell proteases (in particular the chymases) have been clarified to some extent, the processing of procarboxypeptidase A is poorly characterized. Here, we show that mast cells from mice lacking the aspartic protease cathepsin E display an accumulation of procarboxypeptidase A, indicating a defect in carboxypeptidase-A processing. By contrast, mast cells lacking cathepsins B, L or D have normal carboxypeptidase-A processing. Furthermore, recombinant cathepsin E was found to process recombinant procarboxypeptidase A in vitro, under conditions resembling those found in mast-cell granules. Immunohistochemical analysis revealed staining for cathepsin E in mast cells from normal mice but not in mast cells from mice lacking heparin, indicating that cathepsin E is bound to heparin proteoglycan within mast-cell granules. In accordance with this notion, affinity chromatography showed that recombinant cathepsin E bound strongly to heparin under acidic conditions (the conditions prevailing in mast-cell granules) but not at neutral pH. Moreover, mast-cell degranulation resulted in the release of cathepsin E. Taken together, our results indicate that cathepsin E is located in mast-cell secretory granules in complex with heparin proteoglycans, and that it has a role in the processing of procarboxypeptidase A into active protease.