During protein biosynthesis, processing of the N terminus of many proteins may occur through acetylation and deacetylation. The enzyme acylpeptide hydrolase is likely involved in deacetylation of nascent peptide chains or of bioactive peptides. The related enzyme, acylase, hydrolyzes the acetyl amino acid product of the acylpeptide hydrolase reaction to acetate and a free amino acid. There is a reciprocal relationship between the substrates for these enzymes (i.e., substrates for one enzyme are competitive inhibitors for the other). In several cultured cell lines, including normal and malignant cells, the ratio of acylpeptide hydrolase to acylase enzyme activities appears to be coordinated and characteristic for a given cell type. Thus, in normal cultured lung cells, hamster ovary cells, hepatoma cells, and lymphocyte cells, nearly equal amounts of these enzymes are expressed, conducive to optimal processing of acetylated N-terminal residues. Four lines of erythroleukemic cell lines were found to express nearly twice as much acylase as acylpeptide hydrolase activity. In the Ehrlich ascites tumor cell line, where 80% of the proteins have been reported to remain acetylated at their N terminus, acylpeptide hydrolase is hardly expressed but acylase activity is not reduced. The 3p21 region of human chromosome 3, which contains the DNF15S2 locus that encodes acylpeptide hydrolase (Jones et al., Proc Natl Acad Sci USA 1991;88:2194), undergoes deletion in some carcinoma cells; the gene that encodes for the acylase is also present on region 3p of the same chromosome. We found that both acylpeptide hydrolase and acylase activities are practically absent in six small-cell lung carcinoma cell lines tested.(ABSTRACT TRUNCATED AT 250 WORDS)