ABSTRACTEndothia parasiticaprotease shows hysteretic behavior (a lag phase) when acting upon L‐leucyl‐L‐leucine amide at pH 4.5. Initially, the products are L‐leucyl‐L‐leucine, L‐leucyl‐L‐leucyl‐L‐leucine and L‐leucine amide with little formation of L‐leucine and no ammonia. The relative concentration of L‐leucyl‐L‐leucine is about one‐fourth that of L‐leucine amide. As the reaction continues the relative concentration of L‐leucine increases slowly until it is equal to the concentration of L‐leucyl‐L‐leucine near the end of the reaction with each being one‐fourth that of L‐leucine amide. Formation of these products can only be explained by a combination of transpeptidation and hydrolytic reactions. By itself, L‐leucyl‐L‐leucine is cleaved very slowly but when mixed with L‐leucyl‐L‐leucine amide the rate is several fold greater than the combined rates of the two alone. L‐Leucyl‐L‐leucyl‐L‐leucine and L‐leucyl‐L‐leucyl‐L‐leucine amide as substrates ofE. parasiticaprotease give normal kinetic behavior with no evidence of formation of higher molecular weight compounds. Addition of as little as 1 μM L‐leucyl‐L‐leucyl‐L‐leucine (Km= 0.348 mM) to a reaction containing 1 mM L‐leucyl‐L‐leucine amide increases the rate of reaction with a shortening of the lag phase. Addition of 100 μM L‐leucyl‐L‐leucyl‐L‐leucine to such a reaction eliminates the hysteretic behavior. It is proposed thatE. parasiticaprotease is initially in an inactive form which can be activated by substrates as small as L‐leucyl‐L‐leucyl‐L‐leucine but not by L‐leucyl‐L‐leucine amide. During the lag phase observed with substrates such as L‐leucyl‐L‐leucine amide, the enzyme produces, via acyl transpeptidation, larger compounds which can rapidly activate the enzyme. While in the activated form,E. parasiticaprotease cleaves L‐leucyl‐L‐leucine amide via normal kinetic behavior; however, both acyl transpeptidation and hydrolysis still occur as shown by the relative concentrations of L‐leucine, L‐leucyl‐L‐leucine and L‐leucine amide of 1:1:4 near end of the reaction.E. parasiticaprotease cannot