Serpula lacrymans is a basidiomycete cord-forming wood decay fungus which reallocates nitrogen within an extensive perennial mycelial system in response to spatial discontinuities in external nutrient supply. Intracellular stored protein is mobilised by conversion to amino acids at nutrient-poor sites within a mycelium or when a whole mycelium is starved. Intracellular peptidase and proteinase activities of the mycelium were investigated with the aim of identifying proteases specifically activated in response to a nitrogen demand. Mycelium for enzyme extraction grown as surface mats in static liquid culture was homogenised, and the extract used in assays for proteinase and peptidase with various synthetic peptide substrates conjugated to 4-nitroaniline. Activities against different substrates were characterised with respect to pH, inhibitor sensitivity, requirements for divalent metal ions, isoelectric point, and by changes in activities in starved mycelium. Four different activities were found, comprising two peptidases one of which had metalloprotease characteristics, a serine-type proteinase, and a proteinase active at pH 2.5 which was not affected by any of the inhibitors tried. Both the latter were most active in starved mycelium. Isoelectric focusing showed peaks with activities corresponding to the serine-type proteinase and one of the manganese-activated peptidases. Possible roles for these enzymes in nitrogen reallocation during mycelial foraging are discussed.