An apparently unique enzyme, designated protein NH2-terminal asparagine deamidase (PNAD), that specifically converts NH2-terminal asparagine residues of peptide and protein substrates to aspartic acid, has been isolated to homogeneity from porcine liver by an eight-step procedure. PNAD is a relatively low abundance protein, is readily solubilized, and exists as a monomeric species of approximately 33 kDa. PNAD does not act on internal asparagine residues and requires a free N alpha-amino group. It has reduced or no activity on NH2-terminal asparagine dipeptides and no activity toward free asparagine or asparagine amide. It does not act on any NH2-terminal glutamine substrates. PNAD does not show a strong pH dependence suggesting that the enzyme can act equally well on substrates with ionized or unionized alpha-amino groups. The properties and specificity of PNAD are consistent with those expected for the enzyme required for the ubiquitin-dependent turnover of intracellular proteins that initiate with Met-Asn-. Such proteins should be N alpha-acetylated on the retained initiator methionine and can subsequently be modified by the removal of N-acetyl methionine by acylaminoacid hydrolase. Conversion of the resulting NH2-terminal asparagine to aspartic acid by PNAD would render the protein susceptible to arginylation, polyubiquitinylation and degradation as specified by the N-end rule.