Fibroblast activation protein (FAP) is a serine protease of undefined endopeptidase specificity implicated in tumorigenesis. To characterize FAP’s P₄–P₂^′ specificity, we synthesized intramolecularly quenched fluorescent substrate sets based on the FAP cleavage site in α₂-antiplasmin (TSGP-NQ). FAP required substrates with Pro at P₁ and Gly or d-amino acids at P₂ and preferred small, uncharged amino acids at P₃, but tolerated most amino acids at P₄, P₁^′ and P₂^′. These substrate preferences allowed design of peptidyl-chloromethyl ketones that inhibited FAP, but not the related protease, dipeptidyl peptidase-4. Thus, FAP is a narrow specificity endopeptidase and this can be exploited for inhibitor design.