Archaeal preflagellin peptidases and bacterial type IV prepilin peptidases belong to a family of aspartic acid proteases that cleave the leader peptides of precursor proteins with type IV prepilin signal sequences. The substrate repertoire of PibD from the crenarchaeon Sulfolobus solfataricus is unusually diverse. In addition to flagellin, PibD cleaves three sugar-binding proteins unique to this species and a number of proteins with unknown function. Here we demonstrate that PibD contains two aspartic acid residues that are essential for cleavage activity. An additional pair of aspartic acids in a large cytoplasmic loop is also important for function and is possibly involved in leader peptide recognition. Combining the results of transmembrane segment predictions and cysteine-labeling experiments, we suggest a membrane topology model for PibD with the active-site aspartic acid residues exposed to the cytosol.