Dispase, a neutral protease isolated from culture filtrates of Bacillus polymyxa, has proven to be a rapid, effective, but gentle agent for separating intact epidermis from the dermis and intact epithelial sheets in culture from the substratum. In both cases it effects separation by cleaving the basement membrane zone region while preserving the viability of the epithelial cells. Because it is not known what or where in the basement membrane zone Dispase cleaves, we set up studies to define its substrate specificity. Using purified basement membrane components and sodium dodecyl sulfate-polyacrylamide gel electrophoresis we show that Dispase cleaves fibronectin and type IV collagen, but not laminin, type V collagen, serum albumin, or transferrin. The action of Dispase on collagen appears to be selective for type IV collagen in that several stable degradation products are formed, whereas the enzyme degrades type I collagen only minimally. In newborn human skin, as seen by electron microscopy, Dispase removes the lamina densa, rich in type IV collagen, but preserves the anchoring fibrils (structures known to contain type VII collagen) and the epidermal cells. Because its action is so selective, it suggests that Dispase can serve as a powerful tool for dissecting epithelial-mesenchymal interactions.