Calcitonin gene-related peptide (CGRP) is cleaved by an endopeptidase, also known to hydrolyze substance P (SP). The enzyme which was isolated from human cerebrospinal fluid, converted rCGRP into two products, clearly separable on HPLC. Amino acid analysis showed cleavage to occur at Leu16-Ser17. The carboxy-terminal fragment, rCGRP-(17-37), was weakly active in inhibiting 125I-rCGRP binding to a rat medulla oblongata membrane preparation, but it showed no binding to spinal cord membranes. The N-terminal fragment, rCGRP-(1-16), had very low or no affinity. Autoradiography with 125I-rCGRP showed distinct labelling of rat dorsal spinal cord, while there was no consistent pattern with 125I-rCGRP-(1-16). In the isolated guinea pig ileum preparation, the two fragments showed no CGRP-like activity. The ability of CGRP to interfere with SP degradation is offered as the explanation why CGRP has been reported to potentiate several biologic actions of SP.