The vitamin K-dependent blood-clotting proteins contain a gamma-carboxylation recognition site in the propeptide, between the signal peptide and the mature protein, that directs gamma-carboxylation of specific glutamic acid residues. To develop a better substrate for the in vitro assay of the vitamin K-dependent gamma-carboxylase and to understand the substrate recognition requirements of the carboxylase, we prepared synthetic peptides based upon the structure of human proprothrombin. These peptides were employed as substrates for in vitro carboxylation using a partially purified form of the bovine liver carboxylase. A 28-residue peptide (HVFLAPQQARSLLQRVRRANTFLEEVRK), based on residues -18 to +10 in proprothrombin, includes the complete propeptide and the first 10 residues of acarboxyprothrombin. Carboxylation of this peptide is characterized by a Km of 3.6 microM. In contrast, FLEEL is carboxylated with a Km of about 2200 microM. A 10-residue peptide (ANTFLEEVRK), based on residues +1 to +10 in prothrombin, and a 20-residue peptide (ARSLLQRVRRANTFLEEVRK), based on residues -10 to +10 in proprothrombin, are also poor substrates for the carboxylase. Replacement of phenylalanine with alanine at residue 3 (equivalent to position -16 in proprothrombin) in the 28-residue peptide significantly alters the Km to 200 microM. A synthetic propeptide (HVFLAPQQARSLLQRVRRY), homologous to residues -18 to -1 in proprothrombin, inhibited carboxylation of the 28-residue peptide substrate with a Ki of 3.5 microM, but modestly stimulated the carboxylation of the 5- and 10-residue peptide substrates. These results indicate that an intact carboxylation recognition site is required for efficient in vitro carboxylation and that this site includes critical residues in region -18 to -11 of proprothrombin. The carboxylation recognition site in the propeptide binds directly to the carboxylase or to a closely associated protein.