The koji mold Aspergillus oryzae secretes a prolyl dipeptidyl peptidase (DPPIV) when the fungus is cultivated in a medium containing wheat gluten as the sole nitrogen and carbon source (MMWG). We cloned and sequenced the DPPIV gene from an A. oryzae library by using the A. fumigatus dppIV gene as a probe. Reverse transcriptase PCR experiments showed that the A. oryzae dppIV gene consists of two exons, the first of which is only 6 bp long. The gene encodes an 87.2-kDa polypeptide chain which is secreted into the medium as a 95-kDa glycoprotein. Introduction of this gene into A. oryzae leads to overexpression of prolyl dipeptidyl peptidase activity, while disruption of the gene abolishes all prolyl dipeptidyl peptidase activity in MMWG. The dppIV null mutants did not exhibit any change in phenotype other than the absence of prolyl dipeptidyl peptidase activity, suggesting that this activity is not essential. This loss of activity diminished the number of dipeptides and increased the number of larger peptides present in the MMWG culture broth. These effects were reversed by the addition of purified, recombinant DPPIV from the methylotrophic yeast expression vector Pichia pastoris. Our results suggest that the DPPIV enzyme may be of importance in industrial hydrolysis of what gluten-based substrates, which are rich in Pro residues.