N-Acylethanolamine-hydrolyzing acid amidase (NAAA) is a lysosomal enzyme which hydrolyzes bioactive N-acylethanolamines, including anandamide and N-palmitoylethanolamine. NAAA shows acidic pH optimum in terms of both catalytic activity and maturation by specific proteolysis. However, molecular mechanism involved in this characteristic pH dependency remained unclear. Here we report the important role of Glu-195 of human NAAA by analyzing the mutants E195A and E195Q overexpressed in human embryonic kidney 293 cells. Concanamycin A, raising lysosomal pH, inhibited maturation of the wild-type, but not of the Glu-195 mutants. The purified precursors of the mutants, but not the wild-type, were proteolytically cleaved at pH 7.4 during 24-h incubation. Furthermore, when assayed for N-palmitoylethanolamine-hydrolyzing activity at different pH, the mutants did not exhibit a sharp peak around pH 4.5 in the pH-dependent activity profile. Mutants of other seven glutamic acid residues did not show such an abnormality. These results suggested a unique role of Glu-195 in the pH-dependent activity and proteolytic maturation. Moreover, Arg-142, Asp-145, and Asn-287 as well as previously identified Cys-126 were shown to be essential for the proteolytic activation. Since these residues were predicted to be catalytically important, the results strongly suggested that the proteolysis occurs through an autocatalytic mechanism.