An enzyme system in rat kidney has been observed which hydrolyzes ϵ-acetyl- l-lysine, and which, through two or three purification steps, has been concentrated in activity approximately 100 times. The enzyme is more highly active in phosphate than in other buffer mixtures studied, possesses a pH optimum at 7.0–7.2, and is not appreciably affected by most bivalent cations. It is somewhat more active toward ϵ-chloroacetyl- l-lysine than toward ϵ-acetyl- l-lysine and completely or nearly completely inactive toward ϵ-acetyl- d-lysine, ϵ-carbobenzoxy- l-lysine, biocytin, and δ-chloroacetyl- l-ornithine. The enzyme is seemingly active toward α,ϵ-dichloroacetyl- l-lysine, but because of a trace of acylase I in the preparation this observation is not altogether certain. Because of its apparent specificity requirements, the enzyme has been tentatively given the designation of “ϵ-lysine acylase.” Growth studies on rats fed a nearly chemically defined diet including all essential l-amino acids except l-lysine were performed. Supplementation of this diet with ϵ-acetyl- l-lysine led to growth, in accord with the earlier observations of Neuberger and Sanger, and explicable now in part at least in terms of the presence of the ϵ-lysine acylase in the tissues of the rat. Supplementation of the diet with acetyl- d-lysine led to loss of weight which was distinctly less than when the diet was supplemented with d-lysine, and the possibility of a slow inversion of the former compound to the corresponding l-isomer was expressed.