The formation of dental enamel is a precisely regulated and dynamic developmental process. The forming enamel starts as a soft, protein-rich tissue and ends as a hard tissue that is over 95% mineral by weight. Intact amelogenin and its proteolytic cleavage products are the most abundant proteins present within the developing enamel. Proteinases are also present within the enamel matrix and are thought to help regulate enamel development and to expedite the removal of proteins prior to enamel maturation. Recently, a novel matrix metalloproteinase named enamelysin was cloned from the porcine enamel organ. Enamelysin transcripts have previously been observed in the enamel organ and dental papillae of the developing tooth. Here, we show that the sources of the enamelysin transcripts are the ameloblasts of the enamel organ and the odontoblasts of the dental papilla. Furthermore, we show that enamelysin is present within the forming enamel and that it is transported in secretory vesicles prior to its secretion from the ameloblasts. We also characterize the ability of recombinant enamelysin (rMMP-20) to degrade amelogenin under conditions of various pHs and calcium ion concentrations. Enamelysin displayed the greatest activity at neutral pH (7.2) and high calcium ion concentration (10 mM). During the initial stages of enamel formation, the enamel matrix maintains a neutral pH of between 7.0 and 7.4. Thus, enamelysin may play a role in enamel and dentin formation by cleaving proteins that are also present during these initial developmental stages.