Carboxypeptidase E (also called: carboxypeptidase H, enkephalin convertase) is found in neuroendocrine cells and in adrenal gland chromaffin cells. The glycoprotein can be both membrane-associated or soluble. At the C-end of the molecule lies an amphiphilic α-helix which might be responsible for the membrane localisation. Carboxypeptidase E is found in all species of vertebrates that have been examined, and is also present in many other organisms that have been studied (nematode, sea slug). Interesting, carboxypeptidase E is not found in the fruit fly, and another enzyme (presumably carboxypeptidase D) fills in for carboxypeptidase E in this organism.

Carboxypeptidase E appears to have several functions. The active form of carboxypeptidase E was shown to be in secretory vesicles, where it acts as an exopeptidase to activate neuropeptides. It does that by cleaving off basic C-terminal amino acids, producing the active form of the peptide. Products of carboxypeptidase E include insulin, enkephalin, and most other neuroendocrine peptides.

It has also been proposed that membrane-associated carboxypeptidase E acts as a sorting signal for regulated secretory proteins in the trans-Golgi network of the pituitary and in secretory granules; regulated secretory proteins are mostly hormones and neuropeptides. However, this role for carboxypeptidase E remains controversial, and some evidence shows that this enzyme is not necessary for the sorting of regulated secretory proteins.

Mice with mutant carboxypeptidase E, Cpe^fat, display endocrine disorders like obesity and infertility. In some strains of mice, the fat mutation also causes hyperproinsulinemia in adult male mice, but this is not found in all strains of mice. The obesity and infertility in the Cpe^fat mice develop with age; young mice (<8 weeks of age) are fertile and have normal body weight. Peptide processing in Cpe^fat mice is impaired, with a large accumulation of peptides with C-terminal lysine and/or arginine extensions. Levels of the mature forms of peptides are generally reduced in these mice, but not completely eliminated. It is thought that a related enzyme (carboxypeptidase D) also contributes to neuropeptide processing and gives rise to the mature peptides in the Cpe^fat mice.