The highly purified human CG (hCG) CR series is widely used as a reference material in immunological and biological assays. However these hormone preparations, specifically hCG (CR127), exhibit Arg-specific peptidase activity with synthetic peptide substrates. The putative serine protease-like activity associated with hCG (CR127) was almost completely inhibited by diisopropylfluorophosphate, soybean trypsin inhibitor, N-tosyl-L-phenylalanine chloromethyl ketone and to a lesser extent by N-alpha-p-tosyl-L-lysine chloromethyl ketone and was isolated after hydrophobic interaction and affinity chromatography with soybean trypsin inhibitor, which indicated the presence of exogenous protease contaminants rather than intrinsic peptidase activity. 3H-DFP labeling and sodium dodecyl sulfate-polyacrylamide gel electrophoresis of the isolated contaminants revealed two possible serine proteases of apparent mol wts 60,000 and 20,000. The presence of these contaminants had no apparent effect on the receptor binding capability of hCG, however the in vitro biological activity of hCG determined by maximal cAMP production, was decreased after hydrophobic interaction chromatographic purification of the hormone. These observations suggest that the serine protease-like contaminants enhance cAMP production, thereby introducing a significant source of error in biological assays that use hCG (CR127). Further purification of hCG by hydrophobic interaction and affinity chromatography is recommended before its use in bioassays or research.