Granzyme B (GzmB) is a neutral serine protease found in cytotoxic lymphocytes; this enzyme is critically involved in delivering the rapid apoptotic signal to susceptible target cells. GzmB has been difficult to study and has not yet been produced in non-mammalian systems because of the complex processing events that are thought to be required for its activation. In this report, we have successfully produced fully active, soluble recombinant GzmB (rGzmB) in a yeast-based system by fusing GzmB cDNA in frame with yeast α-factor cDNA, using the yeast KEX2 signal peptidase to release the processed enzyme into the supernatant of yeast cultures. We expressed the proenzyme form of GzmB as well and determined that pro-GzmB is efficiently converted to its active form by the cysteine proteinase dipeptidyl peptidase I. The fully processed enzyme was able to hydrolyze the synthetic substrate N-t-butyloxy-carbonyl-L-alanyl-L-alanyl-L-aspartyl (Boc-Ala-Ala-Asp) thiobenzyl ester with a k(cat) of 17 s-1 and catalytic efficiency k(cat)/K(m) of 181,237 M-1 s-1; the recombinant enzyme is therefore at least twice as active as purified native GzmB. In addition, the recombinant enzyme hydrolyzes Boc-Ala-Ala-Met thiobenzyl ester with a k(cat) of 3.2 s- 1 and a catalytic efficiency k(cat)/K(m) of 65,306 M-1 s-1. Purified rGzmB can also cleave the putative substrate caspase-3 into its signature p20/p10 forms. Unlike caspases, rGzmB is not sensitive to inhibition by several peptide-based inhibitors, including Ac-DEVD-CHO, Ac-YVAD-CMK, and ZIETD-FMK, as well as Zn2+ (a known inhibitor of caspase-3). Structural studies of rGzmB may allow us to better understand the substrate specificity of this enzyme and to design better inhibitors.