Rce1p (FACE-2, Type II CAAX prenyl endopeptidase) mediates proteolytic trimming of the C-terminal aaX tripeptide from CaaX proteins that have undergone isoprenylation. Medically relevant targets of Rce1p include the Ras and Ras-related GTPases (e.g., N-Ras, H-Ras, K-Ras, Rho, etc.), which are often mutated in cancer. Rce1p orthologs are present in all branches of life, but only eukaryotic orthologs are known to interact with isoprenylated substrates. A common feature of Rce1p proteins is that they are integral membrane proteins having multiple membrane spans. Eukaryotic Rce1p has been localized to the endoplasmic reticulum (ER), whereas prokaryotic orthologs are presumably located on the plasma membrane. The mechanism and structure of Rce1p, however, remain unresolved. Investigations into the biological role of eukaryotic Rce1p have revealed that Rce1p is not essential for life at the unicellular level, but its absence leads to embryonic lethality in mice and abnormal physiology upon tissue-specific disruption. Multiple assays have been developed for monitoring both the in vitro and in vivo activity of Rce1p. These have been advantageous for investigating the enzymatic properties and physiological role of Rce1p, including its impact on the subcellular localization of substrates. Rce1p is an important proteolytic enzyme to the biomedical community, yet some issues, such as its structure, catalytic mechanism, substrate selectivity, and potential for pharmacological inhibition, remain unresolved.