Dipeptides containing fluorescein or biotin have been incorporated into proteolytic substrate cleavage products of bovine serum albumin generated by human cathepsin S or neutrophil elastase and into a fragment of the 31-kDa interleukin 1beta precursor by human interleukin 1beta-converting enzyme. Incorporation of the nucleophile is blocked by prior inhibition of the enzymes, and is not seen when proteolysis occurs in the absence of label, and the protease is then inhibited before the addition of label. Labeling is dependent on the pH, the time of reaction, and the concentrations of the nucleophile and substrate. Labeling of proteins can be readily detected by SDS-polyacrylamide gel electrophoresis. The pattern of elastase-labeled bovine serum albumin bands differs among P1' Phe, Ala, and Gly, suggesting that nucleophilic attack on acyl enzyme intermediates derived from a large protein may differ from attack on small intermediates. The only observed labeled fragment catalyzed by interleukin 1beta-converting enzyme is fragment 28-116 from the interleukin 1beta precursor, suggesting that the cleavage between residues 27 and 28 is at least as efficient as between residues 116 and 117. This labeling method does not require organic solvent or nonphysiological pH values and thus may be useful for the discovery of novel protease substrates in cells or other in vivo systems or for diagnostic applications.