Cpe(fat/fat) mice are obese, diabetic, and infertile. They have a mutation in carboxypeptidase E (CPE), an enzyme that converts prohormone intermediates to bioactive peptides. The Cpe(fat) mutation leads to rapid degradation of the enzyme. To test whether pro-thyrotropin-releasing hormone (TRH) conversion to TRH involves CPE, processing was examined in the Cpe(fat/fat) mouse. Hypothalamic TRH is depressed by at least 75% compared with wild-type controls. Concentrations of pro-TRH forms are increased in homozygotes. TRH-[Gly(4)-Lys(5)-Arg(6)] and TRH-[Gly(4)-Lys(5)] represent approximately 45% of the total TRH-like immunoreactivity in Cpe(fat/fat) mice; they constitute approximately 1% in controls. Levels of TRH-[Gly(4)] were depressed in homozygotes. Because the hypothalamus contains some TRH, another carboxypeptidase must be responsible for processing. Immunocytochemical studies indicate that TRH neurons contain CPE- and carboxypeptidase D-like immunoreactivity. Recombinant CPE or carboxypeptidase D can convert synthetic TRH-[Gly(4)-Lys(5)] and TRH-[Gly(4)-Lys(5)-Arg(6)] to TRH-[Gly(4)]. When Cpe(fat/fat) mice are exposed to cold, they cannot maintain their body temperatures, and this loss is associated with hypothalamic TRH depletion and reduction in thyroid hormone. These findings demonstrate that the Cpe(fat) mutation can affect not only carboxypeptidase activity but also endoproteolysis. Because Cpe(fat/fat) mice cannot sustain a cold challenge, and because alterations in the hypothalamic-pituitary-thyroid axis can affect metabolism, deficits in pro-TRH processing may contribute to the obese and diabetic phenotype in these mice.