C-terminal amidation is a posttranslational modification found in many neuropeptides. Peptidylglycine alpha-amidating monooxygenase (PAM) catalyzes the synthesis of the biologically essential C-terminal amide from a glycine-extended precursor peptide. Reported herein are the first potent inhibitors of PAM. Dipeptides containing a C-terminal homocysteine and an N-acylated hydrophobic amino acid were found to inhibit PAM with IC50s in the low nanomolar range. Inhibition potency was dependent on both the carboxylate and the thiolate functionalities of the homocysteine and on the hydrophobic groups of the second amino acid. The thiolate was postulated to produce high binding affinities through coordination with the active-site copper. The compound series also exhibited potent inhibition of PAM in rat dorsal root ganglion cells as demonstrated by a dose-dependent increase in the substance P-Gly/substance P ratio. These results indicate that the compounds have sufficient potency and intracellular bioavailability to aid future studies focused on neuropeptide function and the contributions of neuropeptides to various disease processes.