The crystal structure of a Drosophila angiotensin-converting enzyme (ANCE) has recently been solved, revealing features important for the binding of ACE inhibitors and allowing molecular comparisons with the structure of human testicular angiotensin-converting enzyme (tACE). ACER is a second Drosophila ACE that displays both common and distinctive properties. Here we report further functional differences between ANCE and ACER and have constructed a homology model of ACER to help explain these. The model predicts a lack of the Cl–-binding sites, and therefore the strong activation of ACER activity towards enkephalinamide peptides by NaCl suggests alternative sites for Cl– binding. There is a marked difference in the electrostatic charge of the substrate channel between ANCE and ACER, which may explain why the electropositive peptide, MKRSRGPSPRR, is cleaved efficiently by ANCE with a low Km, but does not bind to ACER. Bradykinin (BK) peptides are excellent ANCE substrates. Models of BK docked in the substrate channel suggest that the peptide adopts an N-terminal β-turn, permitting a tight fit of the peptide in the substrate channel. This, together with ionic interactions between the guanidino group of Arg9 of BK and the side chains of Asp360 and Glu150 in the S2′ pocket, are possible reasons for the high-affinity binding of BK. The replacement of Asp360 with a histidine in ACER would explain the higher Km recorded for the hydrolysis of BK peptides by this enzyme. Other differences in the S2′ site of ANCE and ACER also explain the selectivity of RXPA380, a selective inhibitor of human C-domain ACE, which also preferentially inhibits ACER. These structural and enzymatic studies provide insight into the molecular basis for the distinctive enzymatic features of ANCE and ACER.