Plays a role in the cellular breakdown of insulin, APP peptides, IAPP peptides, natriuretic peptides, glucagon, bradykinin, kallidin, and other peptides, and thereby plays a role in intercellular peptide signaling (PubMed:2293021, PubMed:10684867, PubMed:26968463, PubMed:17051221, PubMed:17613531, PubMed:18986166, PubMed:19321446, PubMed:23922390, PubMed:24847884, PubMed:26394692, PubMed:29596046, PubMed:21098034). Substrate binding induces important conformation changes, making it possible to bind and degrade larger substrates, such as insulin (PubMed:23922390, PubMed:26394692, PubMed:29596046). Contributes to the regulation of peptide hormone signaling cascades and regulation of blood glucose homeostasis via its role in the degradation of insulin, glucagon and IAPP (By similarity). Plays a role in the degradation and clearance of APP-derived amyloidogenic peptides that are secreted by neurons and microglia (PubMed:9830016, PubMed:26394692) (Probable). Degrades the natriuretic peptides ANP, BNP and CNP, inactivating their ability to raise intracellular cGMP (PubMed:21098034). Also degrades an aberrant frameshifted 40-residue form of NPPA (fsNPPA) which is associated with familial atrial fibrillation in heterozygous patients (PubMed:21098034). Involved in antigen processing. Produces both the N terminus and the C terminus of MAGEA3-derived antigenic peptide (EVDPIGHLY) that is presented to cytotoxic T lymphocytes by MHC class I. (Microbial infection) The membrane-associated isoform acts as an entry receptor for varicella-zoster virus (VZV). Degradation of insulin, glucagon and other polypeptides. No action on proteins. Binds 1 zinc ion per subunit. Activated by small peptides (By similarity). Activated by ATP and GTP, and to a lesser extent by CTP, TTP and PPPi (PubMed:17613531). Inhibited by bacitracin (PubMed:17055432, PubMed:17613531). In vitro modification of Cys residues impairs enzyme activity (PubMed:18986166). Homodimer (PubMed:17051221, PubMed:19321446, PubMed:23922390, PubMed:26394692, PubMed:29596046) (Probable). Can also form homotetramers (By similarity). (Microbial infection) Interacts (via N-terminus) with varicella-zoster virus (VZV) envelope glycoprotein E (via N-terminus); the membrane-associated isoform may function as an entry receptor for this virus (PubMed:17055432, PubMed:17553876). Present at the cell surface of neuron cells. The membrane-associated isoform is approximately 5 kDa larger than the known cytosolic isoform. Detected in brain and in cerebrospinal fluid (at protein level). The SlyX motif may be involved in the non-conventional secretion of the protein. The N-terminus is blocked. ATP-binding induces a conformation change. Belongs to the peptidase M16 family.