Abstract: Prodynorphin, a multifunctional precursor of several important opioid peptides, is expressed widely in the CNS. It is processed at specific single and paired basic sites to generate various biologically active products. Among the prohormone convertases (PCs), PC1 and PC2 are expressed widely in neuroendocrine tissues and have been proposed to be the major convertases involved in the biosynthesis of hormonal and neural peptides. In this study we have examined the physiological involvement of PC2 in the generation of dynorphin (Dyn) peptides in mice lacking active PC2 as a result of gene disruption. Enzymological and immunological assays were used to confirm the absence of active PC2 in these mice. The processing profiles of Dyn peptides extracted from brains of these mice reveal a complete lack of Dyn A‐8 and a substantial reduction in the levels of Dyn A‐17 and Dyn B‐13. Thus, PC2 appears to be involved in monobasic processing, leading to the generation of Dyn A‐8, Dyn A‐17, and Dyn B‐13 from prodynorphin under physiological conditions. Brains of heterozygous mice exhibit only half the PC2 activity of wild‐type mice; however, the levels of Dyn peptides in these mice are similar to those of wild‐type mice, suggesting that a 50% reduction in PC2 activity is not sufficient to significantly reduce prodynorphin processing. The disruption of the PC2 gene does not lead to compensatory up‐regulation in the levels of other convertases with similar substrate specificity because we find no significant changes in the levels of PC1, PC5/PC6, or furin in these mice as compared with wild‐type mice. Taken together, these results support a critical role for PC2 in the generation of Dyn peptides.