Accurate proteolytic processing of neuropeptide and peptide hormone precursors by members of the kexin/furin family of proteases is key to determining both the identities and activities of signaling peptides. Here we identify amontillado (amon), the Drosophila melanogaster homolog of the mammalian neuropeptide processing protease PC2, and show that in contrast to vertebrate PC2, amontillado expression undergoes extensive regulation in the nervous system during development. In situ hybridization

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... reveals that expression of amontillado is restricted to the final stages of embryogenesis when it is found in anterior sensory structures and in only 168 cells in the brain and ventral nerve cord. After larvae hatch from their egg shells, the sensory structures and most cells in the CNS turn off or substantially reduce amontillado expression, suggesting that amontillado plays a specific role late in embryogenesis. Larvae lacking the chromosomal region containing amontillado show no gross anatomical defects and respond to touch. However, such larvae show a greatly reduced frequency of a hatching behavior of wild-type Drosophila in which larvae swing their heads, scraping through the eggshell with their mouth hooks. Ubiquitous expression of amontillado can restore near wild-type levels of this behavior, whereas expression of amontillado with an alanine substitution for the catalytic histidine cannot. These results suggest that amontillado expression is regulated as part of a programmed modulation of neural signaling that controls hatching behavior by producing specific neuropeptides in particular neurons at an appropriate developmental time.