Peptide alpha amidation is required to produce some hormones, such as gastrin, from their glycine-extended precursors. This terminal posttranslational processing reaction is thought to be essential for the biological activation of many peptide hormones; only amidated gastrin exerts a physiological effect that results in gastric acid secretion. However, both amidated gastrin and glycine-extended gastrin stimulate proliferation of exocrine pancreatic cell line AR4-2J through selective receptors for the substrate and the product, respectively, of peptide alpha amidation. Thus, the amidation reaction may function as a determinant of the specific biological actions of products derived from prohormones.