Gonadal-derived inhibin A and B are essential factors in mammalian reproduction, negatively regulating pituitary production of FSH. Inhibins are synthesized as heterodimers of alpha- and beta-subunits, each comprising an N-terminal pro- and C-terminal mature domain. After dimerization, the inhibin alpha- and beta-subunit prodomains are enzymatically cleaved from the mature domains at consensus RXXR sites (site1). Interestingly, the inhibin alpha-subunit is a unique TGF-beta ligand, comprising a second cleavage site (site2) within its prodomain. Cleavage at site2 in the inhibin alpha-subunit prodomain releases a 43-amino acid proalpha-peptide. We aimed to determine the influence of the proalpha-peptide on inhibin synthesis and bioactivity. Blocking proalpha-peptide release by silencing cleavage site2 (Arg56-Arg61) inhibited both inhibin A and B synthesis. Ligand blot analysis and solid-phase binding assays indicated that the proalpha-peptide binds specifically to a mature 30-kDa inhibin (mean Kd 86 nM) but was unable to bind related activins. The proalpha-peptide suppressed inhibin A and B bioactivity in primary rat pituitary cell cultures. Mechanistically, the proalpha-peptide blocked inhibin A binding to its coreceptor, betaglycan (IC50 131 nM), and the subsequent sequestration of the activin type II receptor (IC50 156 nM), which underscores inhibin s biological activity. Based on the sequential mutations across the inhibin alpha-subunit, the proalpha-peptide binding site was localized to residues Arg341-Thr354, corresponding directly to the betaglycan binding region. Together our findings indicate that the proalpha-peptide limits the synthesis and bioactivity of inhibins.