Granzyme M is a trypsin-fold serine protease that is specifically found in the granules of natural killer cells. This enzyme has been implicated recently in the induction of target cell death by cytotoxic lymphocytes, but unlike granzymes A and B, the molecular mechanism of action of granzyme M is unknown. We have characterized the extended substrate specificity of human granzyme M by using purified recombinant enzyme, several positional scanning libraries of coumarin substrates, and a panel of individual p-nitroanilide and coumarin substrates. In contrast to previous studies conducted using thiobenzyl ester substrates (Smyth, M. J., O'Connor, M. D., Trapani, J. A., Kershaw, M. H., and Brinkworth, R. I. (1996) J. Immunol. 156, 4174-4181), a strong preference for leucine at P1 over methionine was demonstrated. The extended substrate specificity was determined to be lysine = norleucine at P4, broad at P3, proline > alanine at P2, and leucine > norleucine > methionine at P1. The enzyme activity was found to be highly dependent on the length and sequence of substrates, indicative of a regulatory function for human granzyme M. Finally, the interaction between granzyme M and the serpins alpha(1)-antichymotrypsin, alpha(1)-proteinase inhibitor, and proteinase inhibitor 9 was characterized by using a candidate-based approach to identify potential endogenous inhibitors. Proteinase inhibitor 9 was effectively hydrolyzed and inactivated by human granzyme M, raising the possibility that this orphan granzyme bypasses proteinase inhibitor 9 inhibition of granzyme B.