The zymogen of the vacuolar carboxypeptidase Y from Saccharomyces cerevisiae was purified and characterized with respect to activation as well as refolding in vitro. The purified procarboxypeptidase Y has no detectable activity but can be efficiently activated by proteinase K from Tritirachium album. We used this method of activation as a tool for the investigation of refolding procarboxypeptidase Y in vitro. The proenzyme, denatured in 6 M guanidinium chloride, is renatured efficiently after dilution of the denaturant, whereas the mature enzyme regains little activity in the same procedure. Changes in intrinsic fluorescence reveal the mature enzyme to be considerably more stable than the proenzyme toward denaturation with guanidinium chloride. This suggests that the propeptide induces a metastable structure important for overcoming energy barriers that might otherwise obstruct a productive folding pathway. The relatively large number of charged amino acid residues and a high theoretical potential for alpha-helix formation in the carboxypeptidase Y propeptide suggest a structural similarity to a number of other propeptides and heat shock proteins.