An enzyme which catalyzes the coversion of arginyl residues to citrullyl residues in protein was obtained from the extract of the epidermis of newborn rats. The enzyme required Ca²⁺ for its activity. The enzyme activity was enhanced in the presence of DTT. The maximum activity was observed at pH 7.5 at 50°C in the presence of 10 mat CaCl₂ and 2mM DTT. The activity was inhibited strongly by treatment of the enzyme with monoiodoacetate or PCMB, which suggests that the epidermal enzyme is an SH-enzyme. The molecular weight of the enzyme was calculated by gel filtration to be about 48, 000. It was essential for the α-amino or α-carboxyl group of the L-arginine substrate to be involved in a peptide linkage. The enzyme showed marked activities towards N-substituted L-arginine derivatives such as Bz-L-Arg, Bz-L-Arg-NH₂, and Bz-Gly-L-Arg, but the action of the enzyme on free L-arginine was negligible. The enzyme activity was affected by the nature of the residue neighboring the arginyl residue in proteins. The authors propose the name “peptidylarginine deiminase” for this enzyme. A considerable specificity of the enzyme for proteins from the epidermal cells in terminal differentiation was observed. The results suggest that citrullyl residues in membranous protein of horny cells of the epidermis of newborn rat are formed by the action of epidermal peptidylarginine deiminase.