Proteases play a pivotal role in epidermal differentiation and desquamation. Separation of a total protein extract from human reconstructed epidermis by two-dimensional gel electrophoresis and subsequent peptide analysis of a specific protein spot identified a new protein exhibiting similarities with the retroviral aspartic protease family. Cloning of the corresponding full-length cDNA revealed an open reading frame encoding for a new protease of 343 amino acids, containing a putative aspartic protease catalytic domain. We named this protein Skin ASpartic Protease (SASPase). RT-PCR and northern blot analysis of various human tissues revealed that SASPase was specifically expressed within the epidermis. Immunohistochemical analysis showed a particularly intense expression restricted to the granular layers, whereas in diseased skin, its expression was changed. Western blot analysis, using a monoclonal antibody, revealed the expression of two forms of the enzyme: a 28 kDa putative proform and the active 14 kDa form. Recombinant truncated SASPase (SASP28) was generated from a prokaryotic expression system in Escherichia coli as a fusion protein with GST. SASP28 degraded insulin and to a lesser extent casein with a pH optimum of 5. As seen for retroviral proteases, an auto-activation processing was evidenced, generating a 14 kDa protein (SASP14). Site-directed mutagenesis inhibited auto-activation of the enzyme. Indinavir, a potent HIV protease inhibitor used in AIDS therapy, had a significant inhibitory effect on rSASPase auto-activation, which could explain its side effects on skin.