The 54 kd protein subunit of the signal recognition particle (SRP54) has been shown to bind signal sequences by UV crosslinking. Primary structure analysis and phylogenetic comparisons have suggested that SRP54 is composed of two domains: an amino-terminal domain that contains a putative GTP-binding site (G-domain) and a carboxy-terminal domain that contains a high abundance of methionine residues (M-domain). Partial proteolysis of SRP revealed that the two proposed domains of SRP54 indeed represent structurally discrete entities. Upon proteolysis the intact G-domain was released from SRP, whereas the M-domain remained attached to the core of the particle. Reconstitution experiments demonstrated that the isolated M-domain associates with 7SL RNA in the presence of SRP19. In addition, we observed a specific binding of the M-domain directly to 4.5S RNA of Escherichia coli, which contains a structural motif also present in 7SL RNA. This shows that the M-domain contains an RNA binding site, and suggests that SRP54 may be linked to the rest of SRP through this domain by a direct interaction with 7SL RNA. Using UV crosslinking, we found that in an in vitro translation system the preprolactin signal sequence contacts SRP through the M-domain of SRP54. These results imply that the M-domain contains the signal sequence binding site of SRP54, although we cannot exclude that the G-domain may also be in proximity to bound signal sequences.(ABSTRACT TRUNCATED AT 250 WORDS)