Kex2p is the prototype of a Golgi-resident protease responsible for the processing of prohormones in yeast and mammalian cells. A Kex2p-like pathway was shown to be responsible for processing the fungal KP6 protoxin in transgenic tobacco plants. We previously described a chimeric integral membrane reporter protein that traffics through Golgi to the lytic prevacuole where it was proteolytically processed. As a first step to isolate and clone the Kex2p-like protease in plant cells, we designed and used a similar chimeric reporter protein containing Kex2 cleavage sites to assay the Kex2p-like activity and to determine its substrate specificity in tobacco cells. Here we demonstrate that the Kex2 cleavage sites of the reporter were specifically processed by a protease activity with a substrate specificity characteristic of yeast Kex2p. This Kex2p-like protease in tobacco cells is also a Golgi-resident enzyme. Thus, the reporter protein provides a biochemical marker for studying protein traffic through the Golgi in plant cells. These results additionally should allow the design of synthetic substrates for use in biochemical purification of the plant enzyme.