The ability of neuropeptides to act as precursors for smaller, biologically active fragments is discussed in terms of their biotransformation. This process may involve cleavage of the parent peptide by peptidase enzymes to produce shorter polypeptides with defined biological activity, though other enzymic processes such as sulphation and acetylation may be implicated. Detection of the specific fragments in vivo, their release, receptor-binding and biological actions may confirm biotransformation of the parent peptide. Control of biotransformation will depend upon the localization, both regional and subcellular, and the specificity of the enzymes involved. This process may give an additional degree of flexibility to the biological effects of neuropeptides.