A novel caspase-like activity, which is directly regulated with cell proliferation is a candidate to regulate the abundance of the cyclin-dependent kinase inhibitor, p27KIP1, in human lymphoid cells. This activity, which we term KIPase activity, can also cleave a subset of caspase substrates. Here we demonstrate that KIPase is a novel enzyme distinct from any of the previously characterized human caspases. We show that KIPase is active in a variety of cell lineages, its activity is associated with the proliferation of the human T-cell line, Jurkat, and is not inhibited by the broad spectrum caspase inhibitor z-VAD-fmk. Gel filtration analysis revealed that KIPase has a native molecular mass of approximately 100–200 kDa. Furthermore, the activity of KIPase does not change during apoptosis induced by either ligation of FAS or exposure of cells to etoposide. The uniqueness of KIPase is demonstrated by the fact that none of the human caspases tested (1–10) are able to cleave a specific KIPase substrate (Ac-DPSD-AMC) and that an aldehyde modified derivative of the DPSD tetra peptide is unable to inhibit caspases, but is a good inhibitor of KIPase activity. This supports a hypothesis whereby KIPase is a currently unidentified caspase-like enzyme which regulates the abundance of p27KIP1 in a proliferation-dependent manner.