Presumably involved in the processing and regular turnover of intracellular proteins. Catalyzes the removal of unsubstituted N-terminal amino acids from various peptides. Release of an N-terminal amino acid, Xaa-|-Yaa-, in which Xaa is preferably Leu, but may be other amino acids including Pro although not Arg or Lys, and Yaa may be Pro. Amino acid amides and methyl esters are also readily hydrolyzed, but rates on arylamides are exceedingly low. Release of an N-terminal amino acid, preferentially leucine, but not glutamic or aspartic acids. Binds 2 manganese ions per subunit. Belongs to the peptidase M17 family.