Sentrin-1, also called SUMO-1, is a protein of 101 residues that is distantly related to ubiquitin and another ubiquitin-like protein, NEDD8. Here we report the cloning of a novel sentrin-specific protease, SENP1, which has no homology to the known de-ubiquitinating enzymes or ubiquitin C-terminal hydrolases. However, SENP1 is distantly related to the yeast Smt3-specific protease, Ulp1. A COS cell expression system was used to demonstrate the activity of SENP1 in vivo. When HA-tagged sentrin-1 was co-expressed with SENP1, the higher molecular weight sentrin-1 conjugates were completely removed. Surprisingly, the major sentrinized band at 90 kDa remained intact. The disappearance of the high molecular weight sentrin-1 conjugates also coincided with an increase in free sentrin-1 monomers. SENP1 is also active against proteins modified by sentrin-2, but not those modified by ubiquitin or NEDD8. In addition, sentrinized PML, a tumor suppressor protein that resides in the nucleus, was selectively affected by SENP1, whereas sentrinized RanGAP1, which is associated with the cytoplasmic fibrils of the nuclear pore complex, remained intact. The inability of SENP1 to process sentrinized RanGAP1 in vivo is most likely due to its nuclear localization because SENP1 is active against sentrinized RanGAP1 in vitro. The identification of a nuclear-localized, sentrin-specific protease will provide a unique tool to study the role of sentrinization in the biological function of PML and in the pathogenesis of acute promyelocytic leukemia.