An alanyl-alanyl-phenylalanyl-7-amino-4-methylcoumarin–hydrolyzing protease particle copurifying with 26S proteasomes was isolated and identified as tripeptidyl peptidase II (TPPII), a cytosolic subtilisin-like peptidase of unknown function. The particle is larger than the 26S proteasome and has a rod-shaped, dynamic supramolecular structure. TPPII exhibits enhanced activity in proteasome inhibitor–adapted cells and degrades polypeptides by exo- as well as predominantly trypsin-like endoproteolytic cleavage. TPPII may thus participate in extralysosomal polypeptide degradation and may in part account for nonproteasomal epitope generation as postulated for certain major histocompatibility complex class I alleles. In addition, TPPII may be able to substitute for some metabolic functions of the proteasome.