Proteins contribute to a major part of the organic nitrogen (N) in forest soils. This N is mobilized and becomes available to trees as a result of the depolymerizing activities of symbiotic ectomycorrhizal fungi. The mechanisms by which these fungi depolymerize proteins and assimilate the released N are poorly characterized. Biochemical analysis and transcriptome profiling were performed to examine the proteolytic machinery and the uptake system of the ectomycorrhizal basidiomycete Paxillus involutus during the assimilation of organic N from various protein sources and extracts of organic matter. All substrates induced secretion of peptidase activity with an acidic pH optimum, mostly contributed by aspartic peptidases. The peptidase activity was transiently repressed by ammonium. Transcriptional analysis revealed a large number of extracellular endo- and exopeptidases. The expression levels of these peptidases were regulated in parallel with transporters and enzymes involved in the assimilation and metabolism of the released peptides and amino acids. For the first time the molecular components of the protein degradation pathways of an ectomycorrhizal fungus are described. The data suggest that the transcripts encoding these components are regulated in response to the chemical properties and the availability of the protein substrates.