Retroviral proteases are encoded in the retroviral genome and are responsible for maturation and assembly of infectious virus particles. A number of retroviral protease sequences with retroviral elements are integrated in every eukaryotic genome as endogenous retroviruses. Recently, retroviral-like aspartic proteases that were not embedded within endogenous retroviral elements were identified throughout the eukaryotic and prokaryotic genomes. However, the physiological role of this novel protease family, especially in mammals, is not known. During the high throughput in situ hybridization screening of mouse epidermis, as a granular layer-expressing clone, we identified a mouse homologue of SASPase (Skin ASpartic Protease), a recently identified retroviral-like aspartic protease. We detected and purified the endogenous 32-kDa (mSASP32) and 15-kDa (mSASP15) forms of mSASP from mouse stratum corneum extracts and determined their amino acid sequences. Next, we bacterially produced recombinant mSASP15 via autoprocessing of GST-mSASP32. Purified recombinant mSASP15 cleaved a quenched fluorogenic peptide substrate, designed from the autoprocessing site for mSASP32 maximally at pH 5.77, which is close to the pH of the epidermal surface. Finally, we generated mSASP-deficient mice that at 5 weeks of age showed fine wrinkles that ran parallel on the lateral trunk without apparent epidermal differentiation defects. These results indicate that the retroviral-like aspartic protease, SASPase, is involved in prevention of fine wrinkle formation via activation in a weakly acidic stratum corneum environment. This study provides the first evidence that retroviral-like aspartic protease is functionally important in mammalian tissue organization.