Intracellular dipeptidase of Streptococcus cremoris NCDO 924 has been investigated as a marker enzyme for detecting the release of starter enzymes into Cheddar cheese during maturation. Dipeptidases were produced extra- and intracellularly by Str. cremoris in broth cultures, but the intracellular enzyme was distinguishable by its relatively high activity against L-alanylglycine at low temperatures. The presence of dipeptidase activity of intracellular origin was demonstrated in extracts of Cheddar cheese freed from whole starter cells, opaque material of high molecular weight and free amino acids by a combination of centrifugation and gel filtration on Sephadex G200. The enzyme was not detected in cheeses made without starter (δ-gluconic acid lactone cheeses). In fresh curd with a high viable count of starter the dipeptidase activity was low and mostly extracellular. As the count declined the proportion of intracellular enzyme activity increased, reaching a maximum when 90% of the starter cells had died. The total dipeptidase subsequently decreased until the level remained 30% higher than that of the original curd, and changed little on further ripening up to 120 d. There remained a significant proportion of extracellular dipeptidase activity throughout the maturation period studied.